Understanding Buyers and Sellers
When you think about it, buying and selling are what we do in trading. Whether you are trading the currency market, stocks, cryptocurrencies, futures, commodities, equities, and indices, you have to buy or sell to make money. So, let's take some time to understand Buyers and Sellers in the market.
Buyers' market is called an uptrend or bullish market, while Sellers' market is called a downtrend or bearish market. Buyers and Sellers take control of the market from time to time, be it in the long term or the short term. Therefore, a downtrend or an uptrend might last for a month or more.
The interesting part is how traders read the market based on who is in control of the market. The overall market condition might be in an uptrend, but mini-sellers, or what we all know as pullbacks, might be taking their turn. And, the fact that we have mini-sellers in the buyers' market doesn't mean it is now the sellers' market. As long as buyers maintain their territory, it is still their market. The same thing goes for the sellers' market.
Understanding who is in control of the market is very important to the performance of the trade itself. If you come to think of it, it's always dangerous to buy when the market is running up at full speed, or sell when the market is crashing. It sounds counterintuitive, right?
Let's look at it this way, if you want to buy a house, will you buy it when it's expensive or buy it when the real estate agent gives you a discount?. Ah! ah! Now you understand how it really works. The same thing goes for trading. Sellers are always needed in an uptrend in order to buy at a lower price and sell at a higher price. Also, we need buyers to fill our sell orders in a bearish market.
Knowing when and how to enter a trade now depends on your skill as a trader.
Kindly let me know what you think in the comment below!
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