Why Prices Move

Imagine you're trying to book a table at one of the most popular restaurants in your city.

On a typical Tuesday evening, getting a table is easy. You call an hour in advance, and your reservation is confirmed.

But now imagine it's Valentine's Day.

You call the same restaurant.

Every table is already booked.

You ask if there's any availability.

The answer is no.

Then you ask a different question.

"What if I pay double?"

Suddenly, something interesting happens.

The restaurant can't create another table.

The food hasn't changed.

The chefs are the same.

The building is the same.

The only thing that changed was how badly people wanted one of the limited seats.

Whenever demand becomes greater than what's available, price begins to rise.

Now imagine the opposite.

It's a quiet Monday afternoon.

The restaurant is nearly empty.

To attract customers, it announces a special discount & Happy Hours.

Nothing about the restaurant became worse.

The only thing that changed was the balance between demand and supply.

Markets work exactly the same way.

A stock doesn't rise simply because it's a "good company."

It rises when more people are willing to buy than sell at the current price.

Likewise, a stock doesn't fall because it's a "bad company."

It falls when more people are willing to sell than buy at the current price.

This is an important distinction.

There is almost always a buyer and a seller for every completed trade.

What changes is the price at which they're willing to meet.

Imagine a company is trading at $100.

Thousands of buyers are happy to buy at $100.

Thousands of sellers are happy to sell at $100.

Now imagine unexpected news is released.

Suddenly, many more people want to own the stock.

The existing sellers at $100 quickly disappear.

If buyers still want the stock, they must offer $101.

Once those sellers are gone, they offer $102.

Then $103.

The price isn't climbing because someone decided it should.

It's climbing because buyers are competing with one another for a limited number of willing sellers.

The opposite happens during a panic.

If many investors suddenly want to sell but very few are willing to buy at the current price, sellers begin accepting lower and lower prices just to complete their trade.

Prices fall until enough buyers believe the asset has become attractive again.

Every price movement you will ever see—whether it's a tiny tick or a massive market crash—begins with the same simple idea:

One side wanted the trade more than the other.

Charts don't show numbers moving randomly.

They show the constant negotiation between buyers and sellers as they search for the next price.

And that is how every market moves.