I've just realized that supply and demand are not just economic theories or classroom lessons. They are fundamental mechanisms that drive the prices of all kinds of assets, from stocks, gold, energy, to digital goods. Even during tense political situations like the current one, these principles clearly still operate.

Let's understand what supply and demand really are. Essentially, demand is the desire to buy, while supply is the desire to sell. When we plot the relationship between price and quantity, higher prices tend to reduce demand but increase supply. This is what is called the law of supply and demand.

What’s interesting is that actual market prices are not determined solely by either demand or supply alone, but rather at the equilibrium point where the demand and supply curves intersect. At this point, price and quantity tend to stabilize because if the price rises above this point, inventories increase, which puts downward pressure on the price. Conversely, if the price drops, shortages occur, which push prices upward.

The purpose of studying demand is to enable investors to predict the direction in which prices will move. For example, in March, the Strait of Hormuz was closed due to the Iran conflict, causing about 20% of the world's crude oil supply passing through this point to suddenly disappear from the market. Meanwhile, energy demand remained steady. As a result, oil prices surged rapidly. This is a perfect example of a supply shock.

In financial markets, factors affecting demand are diverse, such as system liquidity, interest rates, investor confidence, or even future expectations. Factors influencing supply include corporate policies, IPOs, or regulations. These elements work together and influence each other.

When it comes to stocks, they can also be considered commodities. Therefore, the law of supply and demand can be applied in fundamental analysis. When stock prices fall, it indicates high supply or selling pressure. Conversely, when prices rise, it indicates high demand or buying pressure. Fundamental factors affecting demand include earnings forecasts, economic growth expectations, or structural changes within the company.

For technical analysis, traders use various tools to measure buying and selling strength, such as candlestick analysis, where green indicates strong demand, and red indicates strong supply. They also look for support and resistance levels—support is where demand is waiting to buy, and resistance is where supply is waiting to sell.

Demand Supply Zone analysis is quite popular for timing trades. It involves identifying moments when the price is out of balance, likely to oscillate to find a new equilibrium. When prices move sharply up or down and then pause, traders can enter positions at points where the price breaks out of that consolidation range.

What’s important to understand is that the relationship between supply and demand is not simple. It involves many factors, from macroeconomic conditions to unexpected events like wars or crises. Successful investors are those who can interpret which factors are influencing supply and demand and then predict where prices are headed.

Studying supply and demand requires practical experimentation and continuous learning from real market prices. It’s not something you learn once and master; it’s an ongoing process. If you want to learn more, check out Gate for price data and trends of various assets. Seeing real data helps deepen your understanding.