I just realized that many people are still confused about the fundamental concept that actually drives all market prices—that is, supply and demand. Whether it's stocks, gold, oil, or even crypto, everything depends on the same thing—who wants to buy and who wants to sell.

Let's talk about the basics: demand is the desire to buy at various price levels, while supply is the desire to sell. It’s important to understand that the law of supply refers to the relationship between price and quantity of goods—that when prices go up, sellers are willing to sell more; but when prices go down, they offer less. Conversely, demand means that at higher prices, people buy less; at lower prices, they buy more.

What’s interesting is that the actual prices in the market are determined by the point where the supply and demand curves intersect—called the equilibrium point. If the price is above this point, there will be a shortage of goods, and prices will be pushed down. If the price is below this point, there will be excess supply, and prices will be pulled up.

A clear example happened in 2026 when the Strait of Hormuz was closed due to war, causing about 20% of the world's oil supply to disappear. Meanwhile, energy demand remained unchanged. As a result, prices surged rapidly—this is a disequilibrium.

Now, in financial markets, this gets more complex because many factors influence demand, such as interest rates, investor confidence, news, or even market sentiment. Supply depends on corporate decisions like issuing new shares, share buybacks, or IPOs.

I've noticed that skilled traders use this principle to find trading opportunities. They look for points where prices move rapidly (indicating excess supply or demand) and then pause within a range (where both sides have roughly equal strength). When prices break out of that range, it’s an opportunity because it shows one side has won.

There are two main patterns I see often: Demand Supply Zones, which are used to analyze price trends. If prices keep making new highs, it indicates strong demand. If prices keep making new lows, it indicates strong supply. When prices move within a range, it shows no clear winner yet.

For fundamental analysis, it’s about viewing stock prices as reflections of the demand for that asset. Good news increases demand and raises prices; bad news decreases demand and lowers prices. Earnings forecasts, growth prospects, economic conditions—all influence investors’ buy or sell decisions.

An important point is understanding that both demand and supply are not solely dependent on price. Many other factors are at play. When the economy is doing well, companies want to go public more, increasing supply, but demand also rises. Sometimes these factors move in the same direction; other times, they oppose each other. That’s what makes the market complex and interesting.

If you can read the signals of supply and demand, you can better predict prices—whether using candlestick patterns, trend analysis, or support and resistance levels. All of these reflect the battle between supply and demand. I believe understanding this fundamental principle is more important than using complicated tools. If you know who is buying, who is selling, where, and why, you’re already a step ahead.