O D T 's new signature

[William Waller]

buyers feel it's worth it to buy at a higher price,..and of course they have to buy from the seller, or there would be no transaction (illiquid).
There can never be "more" buyers or sellers,.if there were, the market would come to a stand still!
Hence the zero sum,...
The seller is betting the market will fall,..the buyer is betting the market will rise,....simple 101 trading !!
Don't worry though,..most folk find it hard to get their heads around,.LOL

Being strictly accurate, there could be many more buyers than sellers and vice versa, although of course every buy must be matched by an equivalent sell.

This is not necessarily a zero sum situation though.

Sellers and buyers might have no opinion as to the future direction of the market. They might simply have a need to exchange one currency for another.

There are a great many market participants whose purpose is not currency speculation, for example companies that sell their products or purchase raw materials in foreign countries or in currencies other than their own.

For such companies trading currency is simply another cost of doing business, no different from wages, insurance, raw materials, shipping and so on. If they purchase currency from a third party who makes a profit from the trade, have they made an equivalent loss? No, in the same way that they do not make a loss when they buy material from a supplier who makes a profit from their dealings.

 

[Hilarymannah]

Bill,..I can see where you're confused :
"Being strictly accurate, there could be many more buyers than sellers and vice versa, although of course every buy must be matched by an equivalent sell."
Your thinking seems to be in a contradictory state!

As far as buying from a seller,...both parties could make a profit, depending on when they first got into the market,..
All transactions regarding profit,..are dependent on where the market goes, and where they got in,...

 

[Hilarymannah]

If I had no one to buy my house,..the price would go down, until a buyer out there finds the price attractive! K I S S,....: )

 

[William Waller]

Bill,..I can see where you're confused :
"Being strictly accurate, there could be many more buyers than sellers and vice versa, although of course every buy must be matched by an equivalent sell."
Your thinking seems to be in a contradictory state!

I buyer wants to buy 10 lots at price X. 10 sellers want to sell 1 lot each at price X. More sellers than buyers, but all orders are filled at the desired price.

Number of buyers and sellers is not important, people just use the expression "more buyers / more sellers" as short-hand (it was only a pedantic point that I was making in the first place).

 

[Chartsy]

price goes up because at a PARTICULAR price the liquidity at the ask is less than at the bid so s gobbled up and to find more sellers it ticks up, but there aren't really more buyers than sellers!

 

[Hilarymannah]

I try not the assume what folk are saying,..is why I cause ripples sometimes,....
To assume is to make an ASS out of U and ME
The point I originally made to Oily, was how newbies could easily be mislead. After all, this is a forum for learning,.......(and a bit of fun) : )
He stated, prices moved due to the amount of buyers over sellers,...etc,...

 

[wackypete2]

If I had no one to buy my house,..the price would go down, until a buyer out there finds the price attractive! K I S S,....: )

Just to stir up the pot here...

Definition of seller from Websters: One who sells, promotes, or offers for sale a product or service.

In other words you don't have to actually sell anything to be a seller by this definition. So if no one wanted to buy your house at your offer price, then at that price there would be more sellers than buyers! :cheesy:

Peter

 

[Hilarymannah]

wackypete2,...You're loosing the plot!
And it seems, your comprehension skills are somewhat lacking,...maybe
Tip: Go back and re-read the posts, then sit down, and "think" about what is being communicated!
(drink a few glasses of water before hand) : )

 

[gamma]

Being strictly accurate, there could be many more buyers than sellers and vice versa, although of course every buy must be matched by an equivalent sell.

This is not necessarily a zero sum situation though.

Sellers and buyers might have no opinion as to the future direction of the market. They might simply have a need to exchange one currency for another.

There are a great many market participants whose purpose is not currency speculation, for example companies that sell their products or purchase raw materials in foreign countries or in currencies other than their own.

For such companies trading currency is simply another cost of doing business, no different from wages, insurance, raw materials, shipping and so on. If they purchase currency from a third party who makes a profit from the trade, have they made an equivalent loss? No, in the same way that they do not make a loss when they buy material from a supplier who makes a profit from their dealings.

The most sensible and intelligent post on this thread.
Someone who has the capacity to look beyond the sphere of immediate currency trading.

 

[Hilarymannah]

Gamma ,.It moves away slightly from my main thrust though,..now doesn't it matey,...(Have a chat with your colleague timsk about the comprehension of ones arguement, ref: Roth : )

My proposition is, that the amount of buyers or sellers isn't the reason markets move,.it's due to the amount a particular product is willing to be sold/bought at,.. being pedantic, doesn't exactly help folk learn,..now does it!

 

[Hilarymannah]

Gamma,...And you're supposed to be the forum "guide",..wow,...impressive

 

[gamma]

Gamma,...And you're supposed to be the forum "guide",..wow,...impressive

Perhaps the site needs forum guides like Hilarymanah
I am a little too busy working, to spend too much time here dissecting arguments.
i would be more happy to resign and have Hilarymanah take the mantle of Forum guide.

 

[Hilarymannah]

Gamma,..LOL,...I'm only joking with you,silly,...you do a great job,..
I just like ruffling feathers, every now and then,...my apologies

 

[oildaytrader]

price goes up because at a PARTICULAR price the liquidity at the ask is less than at the bid so s gobbled up and to find more sellers it ticks up, but there aren't really more buyers than sellers!

If moving averages cross or trend line reverses , why are there more speculative buyers/sellers coming out with small orders of micro lots?.More buyers and sellers is another term for more/less demand.

 

[meanreversion]

Gamma ,.It moves away slightly from my main thrust though,..now doesn't it matey,...(Have a chat with your colleague timsk about the comprehension of ones arguement, ref: Roth : )

I thought the main thrust was discussing ODDT's signature. I see he has just made a comment, but it's on ignore so I've no idea what it says.

 

[Hilarymannah]

Oily,....You can wriggle all you like,...but to teach folk, that the reason markets move is because there is more folk in the game, either way, is nonsensical ?
Supply and demand are the psychological aspects of price movement,..but to play the game, both parties have to be in it,....go figure

 

[Hoggums]

There are also situations where some may place orders to distort the appearance of the market, placing them at levels not likely to be filled in order to give the impression there are far more sellers/buyers than is genuine.

Prices do not move because there is are more buyers than sellers, or because people want to buy more than sell, a price moves when no-one is willing to either buy or sell a product at the current price. It is caused by a lack of bids/offers at a price - not too many. This is why you see markets jump around more on low volume than high volume.

A moving average will cross after the price has already moved, the sellers/buyers have already come to the market. An indicator is purely an measure/approximation of what HAS happened. If you believe in the efficient market hypothesis (which I dont) then there is no relation between an indicator's value and future price movements.

 

[Shikamaroo]

"I jumpin in de parry", day late and a dollar short but, aren't you guys and gals taking game theory a bit too far? correct me if i'm wrong but one person wins, the other loses in trading (zero sum game). The only reason that you cant tell someone is losing is because of the share number of participants and varying size of positions used by market participants which makes it difficult to track where positions are netted off. At the end of the day if you have 1 seller and 2 buyers. The buyers enter into a bidding war pushing price up until one buyer says "uncle" and decides to remove his offer to buy. The other two participants can then make a market for the product. We cant see all this playing out due to the number of participants to the market who create liquidity, but that's why they make theories, to explain the complex.

ODT, i disagree with your signature though sure its the war of the buyer and the seller but i think you buy if you expect you can resell higher and sell if you expect that you can buy back lower and profit on the net effect. Whether the market is going up or down at a given point in time is purely a matter of time frame and opinion, plus the trend must end!

 

[William Waller]

I don't understand why this is difficult. Number of buyers and sellers has nothing to do with it, although I imagine that a lot of people use this expression as a kind of short hand.

Hoggums has put it strictly accurately. Price moves when it is not possible to conduct a trade at the current price.

 

[oildaytrader]

A moving average will cross after the price has already moved, the sellers/buyers have already come to the market. An indicator is purely an measure/approximation of what HAS happened. If you believe in the efficient market hypothesis (which I dont) then there is no relation between an indicator's value and future price movements.

My question is on moving averages versus trend lines.Which is better to use and why or should they be used together.I actually like using trend lines.