Supply and demand are fundamental concepts in trading that influence price movements across all markets. Supply refers to the quantity of an asset that sellers are willing to sell at a specific price, while demand is the quantity that buyers are ready to purchase. When demand exceeds supply, prices typically rise as buyers compete for limited availability. Conversely, when supply surpasses demand, prices generally decline as sellers lower prices to attract buyers. Understanding these dynamics helps traders identify potential entry and exit points, as well as market trends. This interplay is essential for making informed trading decisions, as it reflects participants' perceptions and expectations about the value of assets.
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