I just noticed that many people still don't really understand why asset prices go up or down. Most only look at good news or bad news, but in reality, what truly drives everything is the demand and supply graph.

Actually, demand (buying interest) and supply (selling interest) are very simple to understand if you get it. If more people want to buy, the price goes up. If more people want to sell, the price goes down. But the problem is, the factors affecting these two are much more complex than you think.

Take the latest event as an example: the war in the Middle East, closing the Hormuz Strait, causing about 20% of the world's crude oil passing through this point to disappear from the market immediately. This is a true supply shock. The demand for energy remains the same, but the product is suddenly scarce, so prices spike rapidly because demand is still high, but supply has shrunk.

In the financial markets, it's even more complex. Macroeconomic factors like interest rates, economic growth, and liquidity all influence the demand for various assets. On the supply side, decisions by companies—such as issuing new shares, share buybacks, or new regulations—also play a role.

What’s interesting is that these factors work together. When the economy is doing well, companies are more inclined to go public, increasing demand. Supply also increases accordingly. But usually, demand wins, and prices go up.

When it comes to actual stock trading, the demand and supply concept is very applicable. Whether it's fundamental analysis, which views stock prices as a reflection of company value, or technical analysis, which uses tools like candlesticks, trend lines, or support and resistance levels.

For example, with candlesticks: a green candle (closing price higher than opening) indicates demand wins; a red candle (closing lower than opening) indicates supply wins. Doji candles, where open and close are roughly the same, show a standoff—neither side has gained the upper hand yet.

Trading Demand and Supply Zones is a popular method for catching momentum when prices move rapidly (up or down) and then pause within a range. When new factors come in, prices break out of that range and continue moving—this is the entry point for trades.

The first pattern is Demand Zone Drop Base Rally (DBR), which occurs after excess supply. Prices drop sharply, then start to stabilize as buyers step in. When good news arrives, demand wins, and prices break upward—this is a buying opportunity.

The second pattern is Supply Zone Rally Base Drop (RBD), which occurs after excess demand. Prices rise, then start to pause as sellers come in. When bad news hits, supply wins, and prices break downward—this is a selling opportunity.

But most of the time, when prices are trending rather than reversing, trading in the trend is about when demand or supply in the same direction becomes strong again. Prices then continue moving in the same trend.

In summary, if you understand demand, supply, and the factors influencing them, you can better predict prices—whether for stocks, gold, energy, or even digital assets. All of these are driven by the same mechanism.