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Forex What I've never understood about trading

Discussion in 'Forex Forum' started by big_pipin, Jun 14, 2015.

  1. big_pipin

    big_pipin Guest

    I used to think what caused market moves were an imbalance of buyers and sellers, but then I read something that said that the idea of "more buyers than sellers and vice versa doesn't make sense, because for every share, or currency bought or sold, there has to be someone on the other side of the trade".


    If I'm buying 100 shares, there has to be a seller of 100 shares.

    If I'm buying 100,000 shares, there has to be a market maker, or a number of sellers that can sell me the # of shares I want.

    So how does price ever move if for every buyer there is a seller?... how do you fill up a bucket of water if every gallon of water you put in, it leaks out a hole in the bottom?

    People have often used the "auction house" analogy, of an auctioneer and a room full of buyers bidding the price up, but the problem with this analogy is that an auction only goes up in price, and you can't retract your bid once it's made, nor can the auctioneer manipulate the price.

    Source.
     

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