As posted by DB:
"So who's got the upper hand? Who's in charge? It's generally believed -- why I don't know, gurus and books probably -- that when price falls, sellers have the upper hand. When price rises, buyers do. But it is the exact opposite that is the case. Traders are looking for trades, preferably profitable trades. That's pretty much the point of all this. They're not fighting each other. They're not at war. How can one complete a transaction with somebody with whom he's fighting? So when price prints at lower and lower levels, it is buyers who are in charge because they are declining to pay what sellers are or had been asking and are instead insisting that sellers lower their prices. If sellers have to lower their price in order to complete a transaction, this is winning? On the other hand, if buyers are opening up their wallets and saying "here" to the sellers who are asking higher and higher prices, who's winning and who's being played?
I suspect this is what buyers have in mind during those last few bars. They're willing to pay what sellers are asking but only if sellers are willing to offer a better price. At the same time, they're suspicious. If they were gung-ho, they'd be willing to pay whatever sellers asked, which would drive price higher, perhaps even to a new high, in which case everybody would win, at least until the music stopped. But that's for another time.
Sellers, then, are willing to take less for what they have in stock. Buyers are willing to take what sellers have but only at lower prices, though they're not throwing everything they can get their hands on into their shopping carts. Looks to me, then, that buyers, while willing to trade, suspect that they are about to get screwed. And since the professionals sold what they had on the way up (though buyers probably don't know this), there is very little support under this dance floor in case somebody fires a shot and stampedes the cattle."
Putting my thoughts to paper, I think I understand the concept now. Thinking of an auction. I have a rare piece of art work that I am auctioning (selling). The initial price is x. The auctioneer then ASKS for a higher price, do I hear x+1. If there is great interest the auctioneer will continue to ask for a higher price until there is no more interest and it's sold to the man in the big green hat. At that point the person that bought the art work we'll call him Larry now owns the art work and wants to try to sell it to an art gallery for a higher price. When Larry walks into the gallery and it is speculated that the art is fake and the gallery does not want to pay what Larry is asking. Larry can not find a buyer at his price so he then lowers it and continues to do so until he finds someone interested. Mike then steps in and buys the art work at a steal because he found out the art work actually is real. Mike brings the art work to the next auction and the cycle continues. The difference is as traders we can profit as prices move up or down and I suppose amateurs or those that don't know what they are doing often times get screwed just like Larry.
