I just realized why asset prices move the way they do, while most people only look at numbers, data, or news. The real answer lies in the meaning of supply and demand, which are the most fundamental driving forces of the market. Whether it's stocks, energy, gold, or even digital assets.

This may sound complicated, but when broken down, it's quite simple. The meaning of supply and demand are just words for buying and selling. When more people want to buy than want to sell, the price goes up. Conversely, when more people want to sell than want to buy, the price goes down.

Let's look at demand first. This is the desire to purchase goods or services. If the price drops, people are usually willing to buy more. If the price rises, people buy less. This is called the law of demand. Why is this? Because when prices fall, it feels like our money is worth more (Income Effect). And when prices are lower, we choose this product over similar products (Substitution Effect).

Demand is the other side of the coin. This is the willingness of producers and sellers to sell. If the price rises, sellers are usually happy to sell more because they make more profit. If the price drops, they sell less. This is the law of supply.

The point where the buy and sell prices meet is called equilibrium. At this point, the quantity buyers want to buy matches the quantity sellers want to sell. Prices tend to stabilize because if prices go too high, sellers will have excess stock, which pushes prices down. If prices fall too low, goods become scarce, and prices are pushed back up.

A clear example is the recent situation in the Strait of Hormuz. This strait accounts for about 20% of the world's oil transportation. When the route was closed due to war, the oil supply in the market suddenly decreased. This is called a Supply Shock. Meanwhile, the demand for energy remained the same, causing oil prices to spike rapidly.

This concept of supply and demand isn't limited to everyday goods; stocks are also considered commodities. When a company has good news, investors want to buy more shares (demand increases), pushing the stock price up. When there’s bad news, investors want to sell (supply increases), causing the stock price to fall.

In technical analysis, traders often look at candlesticks to gauge buying and selling pressure. A green candlestick indicates buying dominance, while a red candlestick shows selling dominance. A Doji (which opens and closes at the same price) indicates that both sides have equal strength, and the market is uncertain.

Another method is to observe support and resistance levels. Support is where buyers are waiting to buy, and resistance is where sellers are waiting to sell. When the price breaks above resistance, it often continues upward. When it breaks below support, it usually continues downward.

A popular technique is the Demand and Supply Zone, which looks for points where the price loses balance. When the price rises quickly and enters a consolidation zone, a good buy signal occurs if positive news comes, causing the price to break above the zone and continue upward. Conversely, if the price drops sharply into a zone and negative news appears, it may break below and continue downward, signaling a good sell opportunity.

The key is understanding that supply and demand are not just theories for economists. They reflect the psychology and behavior of buyers and sellers in the market. Once you grasp this, analyzing price charts becomes a matter of observing the real battle between buying and selling forces.

For serious investors, studying supply and demand isn't difficult; it requires practical application. Observe the actual movement of asset prices daily, and notice when demand wins and when supply wins. The more real examples you see, the deeper your understanding becomes. And importantly, if you want to trade or invest on platforms like Gate, observe how different assets' supply and demand move.