What is generally ‘not seen’ is
the pressure or lack thereof of ‘resupply’ at limit.
What causes a security price movement?
- Thread starter novicetrader69
- Start date
What is generally ‘not seen’ is
the pressure or lack thereof of ‘resupply’ at limit.
Not in the least.
One of my favorite [classroom] examples is, "Suppose you're working a particular farmer's table, and there are baskets in front of you labeled "$1/qt" and around the corner comes a broken-down old pick-up truck *heaped* with unboxed tomatoes at peak ripeness. What is your response?"
So, just add that to the list above: what happens to market price when Qs↑ from the pick-up truck's load? What do YOU do to the price on YOUR table, when you spy that truck pulling in?
"YIPES!"
To bring this back to financial markets, what happens to TSLA when Audi offers an e-Tron?
What happens to any pharma when a patent expires?
What happens to the Euro when the Fed raises rates?
(What happens to the US$ when China re-values the renminbi?)
etc etc etc...
Not in the least.
One of my favorite [classroom] examples is, "Suppose you're working a particular farmer's table, and there are baskets in front of you labeled "$1/qt" and around the corner comes a broken-down old pick-up truck *heaped* with unboxed tomatoes at peak ripeness. What is your response?"
So, just add that to the list above: what happens to market price when Qs↑ from the pick-up truck's load? What do YOU do to the price on YOUR table, when you spy that truck pulling in?
"YIPES!"
To bring this back to financial markets, what happens to TSLA when Audi offers an e-Tron?
What happens to any pharma when a patent expires?
What happens to the Euro when the Fed raises rates?
(What happens to the US$ when China re-values the renminbi?)
etc etc etc...
We'll just have to agree to disagree. In your example, a tomato farmer can 'see' the other farmer's pu-truck. In my example that pu truck is not 'seen' and you are wondering why your tomato's are not selling as they have last week or last year at this time. All you know is that you have a bunch of tomato's that have to be sold today.
The nuance is the difference in market pace.
As for your macro examples, not my forte' and beyond my knowledge base. From my pov, regardless of the thinking behind eyeballs, all eyeballs are looking at some variation of a PV chart or table. All market participants actions or lack thereof are distilled to that simple reference in the NOW.
My commentary is from watching the DOM at market turning points. And from what I can tell from your postings, we both operate in different arena's. I in the one that you have determined long ago to be 'noise'.
you still don't get it, I also have this question when I started started.
It works like an auctions system, everybody submit the price they want to buy or sell, and the best price appears in the bid or ask. The last price is the price at which the last transaction took place, ( in stock and futures, the chart always shows the last price but not spot forex).
so if there are more seller than buyers, the sellers will lower the price on the ask, if the spread ( the difference between bid and ask) is 1, then all the little buy orders on the bid will be executed, and the bid price move lower to the next best price and the last price is displayed on the chart.
in that ways, the Ask price moved lower, the bid price also moved lower and the last price displayed on the chart moves lower.
Hence, 'the clock is ticking down.' Yeah, we're already there.
And any other example you care to draw will still come down to Qd =\= Qs.
If suppliers need to sell more, price will go down.
If buyers need to take more home, price will go up.
(And if your t'matters ain't sellin', your price 'is too damn high.')
Last edited:
Hence, 'the clock is ticking down.' Yeah, we're already there.
And any other example you care to draw will still come down to Qd =\= Qs.
If suppliers need to sell more, price will go down.
If buyers need to take more home, price will go up.
(And if your t'matters ain't sellin', your price 'is too damn high.')
I appreciate the discussion.
On first pass, the equation would be more like:
Qm (Qd =\= Qs) =\= Ql (Qd =\= Qs)
Qm is orders at market
Ql is orders at limit
Price will also go down regardless of what the sellers need or want if there are no buyers resupplying at limit.
Price will go up regardless of what the buyers need or want if there are no sellers resupplying at limit.
Some would say that’s the same thing as what you are saying but phrased in a different way.
The point I’m making is that there is an observable difference on a tactical level.
This is seen at market turning points in that a majority of standing limits go unfilled as the minority takes price in the opposite direction.
And as aggregated volume, I’d agree with your perspective.
@Peter10 I'm trying to understand but things need to make sense to me. If last price were the price at which last transaction took place it would be much to easy to manipulate price inducing others to start a trend in the direction you want. It can't work this way.
nt
Last edited:
induce others like how?
Be both the buyer and the seller and sell higher than the current price if I want price to move up or sell lower if I want it to move down
nt