searching for holy-grail.. is this theory true?

cointoss

Member
50 5
i will straight to the point, in traditional market suppose you had some money and met with an apple seller. you bought all of the apples from him for $1.00 each, then how is that relevant to market price eventually will go up?

i would assume that when the next batch of apple coming, the apple trader decided to sell $1.50 because you bought all of the apple previously? or is it the apple seller want to keep the price high so that the product still exist in the market?

in forex market, who exactly we buy from? suppose it is the bank.. so assuming, theres a billion dollar hedge fund, and they buy 100million lot of eur/usd in a day, eventually price goes up? would this mean..the hedge fund always profitable as long as they enter big lot size?(can this considered as holy-grail?) then when price goes in their favor, they close position and cash out with profit.

some expert pls comment. thx
 

Shakone

Senior member
2,458 665
Suggest you read about Supply and Demand economics 101 and read a bit more about how the forex market works - what you're buying/exchanging and who from/with. Plenty of free info available online for both if you look
 
Last edited:

wackypete2

Legendary member
10,229 2,054
i will straight to the point, in traditional market suppose you had some money and met with an apple seller. you bought all of the apples from him for $1.00 each, then how is that relevant to market price eventually will go up?

i would assume that when the next batch of apple coming, the apple trader decided to sell $1.50 because you bought all of the apple previously? or is it the apple seller want to keep the price high so that the product still exist in the market?


in forex market, who exactly we buy from? suppose it is the bank.. so assuming, theres a billion dollar hedge fund, and they buy 100million lot of eur/usd in a day, eventually price goes up? would this mean..the hedge fund always profitable as long as they enter big lot size?(can this considered as holy-grail?) then when price goes in their favor, they close position and cash out with profit.

some expert pls comment. thx

Suppose there were 100 apple sellers and you were the only one buying. Certainly you can only buy a fraction of the total apples for sale. What would happen to price then?

Peter
 
M

member275544

0 0
Suppose there were 100 apple sellers and you were the only one buying. Certainly you can only buy a fraction of the total apples for sale. What would happen to price then?

Peter

They are totally worthless, unless an arab comes along with a camel that the owner of the apples wanted in which case the bit coin is invented. F* knows where I buy them from
 

cointoss

Member
50 5
Suggest you read about Supply and Demand economics 101 and read a bit more about how the forex market works - what you're buying/exchanging and who from/with. Plenty of free info available online for both if you look

supply and demand in economy usually means, the person with money and willing to buy the things as he/she perceived as valuable. or in other way, things in the market always sold to the highest bidder

in forex, i assume, ppl buy because see certain price is either too low.. and will go up in the future. opposite also same, as ppl sell currency, because overvalued

but im expecting some expert comment or shed some lights, how exchange rate going up and down, etc,..then we searching for holy-grail so to speak lol
 
  • Like
Reactions: Shakone

cointoss

Member
50 5
Suppose there were 100 apple sellers and you were the only one buying. Certainly you can only buy a fraction of the total apples for sale. What would happen to price then?

Peter

price remain unchanged? because has no effect.. but thats why im using example as if billion dollar hedge fund buy 100 million eur/usd lot in a day.. werent the price definitely goes up? thats why im saying 'holy-grail' as the hedge fund totally control the price. but this is just assumption
 
M

member275544

0 0
price remain unchanged? because has no effect.. but thats why im using example as if billion dollar hedge fund buy 100 million eur/usd lot in a day.. werent the price definitely goes up? thats why im saying 'holy-grail' as the hedge fund totally control the price. but this is just assumption

price only remains the same if supply and demand are equal. whats happened to supply in this case?
 

DionysusToast

Legendary member
5,963 1,499
Suggest you read about Supply and Demand economics 101 and read a bit more about how the forex market works - what you're buying/exchanging and who from/with. Plenty of free info available online for both if you look

I suggest he completely ignore supply and demand 'cause it's got fook all to do with it.

In futures, there is infinite supply. In stocks there is finite supply (float). Both markets exist to match buyers and sellers, which it does.

The reason price moves in futures markets it because of consumption of liquidity and not supply and demand in the traditional economic sense.

Stocks are pretty much the same in terms of price moves being caused primarily by consumption of liquidity but granted, a stock can become scarce and so traditional supply/demand theories do come into play.

There's times for instance when lots of people have sold shares they didn't actually have and this has gone on to such an extreme that they are forced to buy into scarcity that they themselves created. A market can be cornered in stocks too.

As for Forex, for most people they aren't even playing the forex market but betting against their broker. I don't think market dynamics come into play as much as the dynamics of your broker wanting a new red Ferrari.
 

numbertea

Well-known member
257 9
I suggest he completely ignore supply and demand 'cause it's got fook all to do with it.

The reason price moves in futures markets it because of consumption of liquidity and not supply and demand in the traditional economic sense.

You hit it my friend.

Cheers
 

wackypete2

Legendary member
10,229 2,054
I suggest he completely ignore supply and demand 'cause it's got fook all to do with it.

In futures, there is infinite supply. In stocks there is finite supply (float). Both markets exist to match buyers and sellers, which it does.

The reason price moves in futures markets it because of consumption of liquidity and not supply and demand in the traditional economic sense.

Stocks are pretty much the same in terms of price moves being caused primarily by consumption of liquidity but granted, a stock can become scarce and so traditional supply/demand theories do come into play.

There's times for instance when lots of people have sold shares they didn't actually have and this has gone on to such an extreme that they are forced to buy into scarcity that they themselves created. A market can be cornered in stocks too.

As for Forex, for most people they aren't even playing the forex market but betting against their broker. I don't think market dynamics come into play as much as the dynamics of your broker wanting a new red Ferrari.

There is not infinite supply of the underlying commodity. You can't just discount what effect that has on prices just because there's an infinite supply of contracts to be written.

Peter
 

ezrydn

Junior member
32 2
Hey, Pete,

Who's your friend in the pix? I run with a Goffin Cockatoo who's owned me for the last 36 years. I'd be lost without him. He/She looks good! Give 'em a head scratch for me. Skip's just finishing his moult. Feathers EVERYWHERE! You know what I'm saying. LOL
 
  • Like
Reactions: wackypete2

numbertea

Well-known member
257 9
There is not infinite supply of the underlying commodity. You can't just discount what effect that has on prices just because there's an infinite supply of contracts to be written.

Peter

You are right... That's why the prices come back to normalization after swinging due to market pressures. Miss a trade today, don't worry, there will another tomorrow.

Cheers
 

Shakone

Senior member
2,458 665
I suggest he completely ignore supply and demand 'cause it's got fook all to do with it.

In futures, there is infinite supply. In stocks there is finite supply (float). Both markets exist to match buyers and sellers, which it does.

The reason price moves in futures markets it because of consumption of liquidity and not supply and demand in the traditional economic sense.

Stocks are pretty much the same in terms of price moves being caused primarily by consumption of liquidity but granted, a stock can become scarce and so traditional supply/demand theories do come into play.

There's times for instance when lots of people have sold shares they didn't actually have and this has gone on to such an extreme that they are forced to buy into scarcity that they themselves created. A market can be cornered in stocks too.

As for Forex, for most people they aren't even playing the forex market but betting against their broker. I don't think market dynamics come into play as much as the dynamics of your broker wanting a new red Ferrari.

To suggest there is infinite supply is silly.

The OP posted about apples in a market and why price moves. If he doesn't understand that, then my opinion is he should first start with understanding supply and demand, since this is how he framed the question and how he indicated he wants to understand things. He now doesn't want to understand such things, which is fair enough.

in traditional market suppose you had some money and met with an apple seller. you bought all of the apples from him for $1.00 each, then how is that relevant to market price eventually will go up?
Note above, he doesn't understand how the price of apples may change in a traditional market.

You say the reason price moves in futures is because of consumption of liquidity. Only this? When price opens after the weekend, what liquidity was consumed in the mean time to move price? How could it move if liquidity wasn't consumed? Then one could ask why is liquidity consumed? Might it have something to do with demand at a particular price?

I think it's a fair assumption that the price at which people are willing to transact at is relevant to price movement, i.e. the supply and demand is relevant. You think otherwise.

When you look to go long or short, in what size can you transact at a particular price? Infinite? Is there some sort of supply at a particular price or not, such that if demand exceeds that, the price might move? You seem to think this is all irrelevant, so I'll stop here. We clearly have completely different ideas about this, as I think supply and demand is essential to price movement and you think 'it's got fook all to do with it', and I doubt the difference is reconcilable, but I do hope your understanding works well for you and gives you plenty of profits.
 
Last edited:
  • Like
Reactions: tar
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock