𝗪𝗛𝗔𝗧 𝗜𝗦 𝗣𝗥𝗜𝗖𝗘 ?
Traders can be divided into 3 groups: buyers , sellers and undecided. Buyers want to pay as little as possible, and sellers want to charge as much as possible. Their permanent conflict is reflected in bid-ask spreads
1/n
ASK is what a seller asks for his merchandise.
BID is what a buyer offers for that merchandise.
A buyer has a choice: to wait until price comes down or pay what sellers demand. A seller has similar choice: wait untill price rise or accept a lower offer for his merchandise.
2/n
A trade occurs when there is a momentary meeting of two minds: an eager bull agrees to a seller's terms and pays up, or an eager bear agrees to a buyer's terms and sells a little cheaper.
3/n
The presence of undecided traders puts pressure on bulls and bears. Buyers and sellers move fast because they know that they're surrounded by a crowd of undecided traders who may step in and snatch away their deal at any moment.
4/n
The buyer knows that if he thinks too long, another trader can step in and buy ahead of him. A seller knows that if he tries to hold out for a higher price, another trader may step in and sell at a lower price.
5/n
The crows of undecided traders makes buyers and sellers more willing to deal with their opponents. A trade occurs when there is a meeting of two minds.
𝗧𝗛𝗘 𝗡𝗘𝗪 𝗧𝗥𝗔𝗗𝗜𝗡𝗚 𝗙𝗢𝗥 𝗔 𝗟𝗜𝗩𝗜𝗡𝗚 𝗕𝗬 𝗗𝗥. 𝗔𝗟𝗘𝗫𝗔𝗡𝗗𝗘𝗥 𝗘𝗟𝗗𝗘𝗥
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