TradingBlog

Forces come in pairs. For every action, there is contrary reaction. The primary thing that comes to mind is those purchasers were willing to buy at higher and higher prices. While one certainly can have one seller selling to several buyers, they can also have multiple sellers selling to one buyer that would cause rising prices. So it is not the number of buyers to sellers that cause price to rise. Rather, it is the readiness of buyers to acknowledge higher and higher asking prices from the sellers.

‘Buyer perception’ varies among businessmen. It is the potential buyers do not buy the vehicle because they perceive a commodity as not unworthy it for them at the asking cost. Of course, they may think that the asking price is fair, but they didn’t like the color or the make. Yet, those prospective buyers may have bought the car anyway had the price been much lower. For those prospective buyers that did not buy, there may be a price that would turn them into buyers.

Presume you had ten potential car buyers out looking at the same car. At the present asking price, maybe only one of the ten feels it is worth buying at the asking price and would buy it. As you keep lowering the price, however, more and more may then consider it a good buy and want to buy it. Perception is a mental function. Therefore, we must address the ‘mental’, the ‘psychological’ angle of buying. When we consider the psychological aspect, we must consider the ‘emotional’ aspect as well. Our mental perception is mostly affected by information.

Working back from the actual buying and selling to the effects that may show the way to those final actions, you get a better accepting of the inner workings of market price action. The market trader can also reach a point of making highly accurate forecasts of market behavior, enough so as to be able to increase ones odds of getting on the right side of most trades.