Why Price Moves: The Truth
47sDirectly addresses a common misconception with a bold statement, hooking viewers who want to understand market mechanics.
▶ Play ClipAI Summary
This tutorial explains how to find high-probability supply and demand zones by reading sharp price moves and understanding who is on the other side of every trade. It also walks through a trained trader's mindset, the Costco analogy for retail buyers, and a practical step-by-step entry plan with stop-loss and take-profit placement.
Chapters
[00:00]
Why markets actually move
A chart moves up only when buying pressure is stronger than selling pressure, and it moves down only when selling pressure overwhelms buyers. Indicators are only a reflection of that underlying imbalance.
[01:12]
No reversal until the balance shifts
When price drops, more buyers enter and cause pullbacks, but an uptrend or reversal only happens when a large majority of buyers take control. Strong moves need strong participation.
[02:57]
Always question the other side of the trade
A hedge fund manager emphasized asking who is on the other side of every trade. If you buy, someone else confidently sells. A good trader would rather enter against a bad trader than take a trade against professional money.
[03:46]
Sharp closedowns show when sellers are in control
The only reliable way to define control is a sharp price move. A fast downward move marks an area of supply; a fast upward move marks an area of demand.
[04:29]
The Costco analogy of trading
Institutional-style traders buy cheap from sellers who need to get out, then sell higher to retail traders who are willing to overpay. Retail should think about where price is gladly — demand zones — not chase breakouts into supply.
[05:39]
Two questions that make a profitable trader
First, find where drastically more buyers and sellers are present. Second, identify where bad or inconsistent traders are buying and selling. Answer both correctly and you know where the zone is set.
[06:44]
Enter at the request and exit at supply
When price slowly returns to the demand zone, enter long. Put a stop-loss below the demand area and take profit at the supply area. This is the same setup from beginning to end.
[08:14]
Fair value gaps make zones stronger
A demand zone connected to a fair value gap often shows that buyers were clearly in control. The same applies to a supply zone with an accompanying gap, giving extra confirmation that the zone matters.
The real insight is to treat price chart as a conflict between experienced and less experienced traders, with meaningful strength that marks the boundaries between activity and retail risk.
Mentioned in this Video
Tutorial Checklist
1
03:31
Look for a sharp downward move. That move points the moment when sellers investors forced to become winners.
4
05:39
Define the majority supply/demand areas: buyers outweigh sellers in demand, sellers outweigh buyers in supply.
5
06:09
Avoid ambiguous areas without sharp moves, because slow drift only tells you that there were slightly more sellers than buyers, not that a real zone has formed.
6
06:44
Wait for price to lag back to the demand zone. Slow price return is the signal, not a fast crash straight into the zone.
7
08:56
When price reaches the demand zone, enter long, set the stop-loss below the demand area and the take-profit at supply area.
8
08:14
Only take a zone if it is connected to a fair value gap, which indicates decisive buyer/seller participation.
Study Flashcards (8)
What causes a chart to rise?
easy
Click to reveal answer
What causes a chart to rise?
easy
Click to reveal answer
More buying pressure than selling pressure.
00:15
What marks an area of supply on a chart?
medium
Click to reveal answer
What marks an area of supply on a chart?
medium
Click to reveal answer
A sharp downward move after a point, meaning there were drastically more sellers than buyers.
03:58
What must happen for a chart to move upside after a downtrend?
medium
Click to reveal answer
What must happen for a chart to move upside after a downtrend?
medium
Click to reveal answer
A large majority of buyers starts entering and completely reverses the selling pressure.
01:25
What is the key mindset shift per the hedge fund manager?
medium
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What is the key mindset shift per the hedge fund manager?
medium
Click to reveal answer
Always ask when is on the other side of the trade and whether you want to buy from a good trader or a bad trader.
02:57
What defines a valid supply/demand zone?
hard
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What defines a valid supply/demand zone?
hard
Click to reveal answer
A sharp move; if the chart only drifts slowly, there is no valid zone because it only shows slightly more sellers than buyers.
06:09
What are the first two questions a profitable trader must answer?
hard
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What are the first two questions a profitable trader must answer?
hard
Click to reveal answer
Where are the majority of buyers and sellers? And where are bad traders buying and selling?
05:39
At the time of execution, where is only a stop-loss and take-profit placed?
medium
Click to reveal answer
At the time of execution, where is only a stop-loss and take-profit placed?
medium
Click to reveal answer
Below the area of demand for the stop-loss and at the area of supply for the take-profit.
06:44
What does a fair value gap connected to a demand zone indicate?
easy
Click to reveal answer
What does a fair value gap connected to a demand zone indicate?
easy
Click to reveal answer
It shows that there were many more buyers than sellers in that area, making the zone stronger.
08:14
💡 Key Takeaways
⚖️
Who is on the other side
Shifts trading from probability formulas into market games theory and the concept of trader's edge.
02:57
🔧
Sharp movements reveal control
Provides a single objective criteria for finding supply/demand zones: sharp move = real pressure.
03:46
💡
Two questions that define profitability
Turns a vague topic into a repeated process, almost like scanning for market where it will be.
05:39
🔧
Fair value gaps add confluence
Gives traders a built-in way to filter zones and avoid bad low-confluent entries.
08:14Full Transcript
[00:00] Including this hedge fund manager that explains exactly how he uses it in an interview. But we and demand in the first place? To understand that, we have to dive deeper
[00:15] into the core concepts of why the market moves Why does the market move in the way that it does? is more buying pressure than selling pressure. The only way a chart will move down is if there oh tradinglab that is so obvious. Why are you wasting our time and even telling us this
[00:35] A lot of people will watch a youtube video, get told to draw some fancy rectangle on their chart by a random trading guru because they say it works, but in reality the
[00:47] are told it works. But not my viewers! You guys are smart. You actually want to learn. So look at this picture.
[01:00] The red, represents the sellers winning. The green, represents the buyers winning. When you have a ton of sellers. Like in this area, price will drop fast and sharp.
[01:12] As price starts to go down, more and more buyers will start to fight against the sellers. Slowly gaining back control. Now as more and more buyers are entering,
[01:24] this can cause little pullbacks on the chart. But the chart s momentum is still overall bearish. Price will only fully reverse once there is a large majority of buyers compared to sellers. will be fast sharp move to the upside. Then the whole process repeats itself.
[01:43] how the market moves. You see, one day I got bored articles when im bored. I m a nerd. Anyways, I was reading an article that
[01:56] interviewed a hedge fund manager and how he looks at the market. But before we get to what he said, let me show you something. Before sharing it with you guys, I wanted to test it out for myself to see if it actually worked.
[02:13] So I funded my trading account with $50,000 for testing. I Found the guy, who seemed to be pretty good and had a high win rate. So all I had to do was click this follow and my account would automatically take all the trades
[02:30] this specific trader took automatically. The analyst has taken 5 trades since So far my account is up $7,646 Not bad for just clicking a follow button.
[02:44] But ill proceed to update you guys through out the weeks to let you know how my account is doing. you can check it out. Okay back to the video.
[02:57] that really stuck out to me. you need to focus on who is on the other side of the trade Whenever you buy a position. Which means, there is always someone who thinks the chart is going to go in the
[03:13] opposite direction than what you think. Now this is a very VERY important from someone who is selling. Would you rather buy from a good trader or a bad trader? someone who is inconsistently profitable. If you start thinking like this when trading.
[03:31] It will change the way you take trades. if you don t know where these profitable traders are selling, you might just be one of those bad traders they are selling to. Going back to this chart. The only way we know a large
[03:46] group of sellers or buyers are in complete control is if there is a sharp move. So take this chart for instance. When I look at this chart. I m not trying to predict the future. I m just looking at where the majority of buyers and sellers are.
[03:58] Here, the chart had a sharp downwards move from this point. Meaning there were way more sellers, than buyers from this point on. In other words, an area of supply. If there wasn t drastically more sellers at this point. Price would just continue
[04:14] moves sharp to the downside. Here the opposite is true. than sellers. Or an area of demand. Another way to look at this is like this:
[04:29] You can buy anything from there. But what is costco s business plan? Them what do they do? They sell it to a retail
[04:41] money is if they sell to a quote on quote bad buyer or someone who is willing to pay more than what they did for the product. You should look at trading the exact same way.
[04:54] Obviously at a low price. Where are you selling to the retail buyer? At a high price. Now remember that statement I made before? In order to be a winning trader, you have to sell to a losing trader.
[05:07] be buying most likely? A lot of retail traders will buy in this area, maybe because they see some momentum building up, an indicator tells them to enter, or whatever the reasoning is. But they are missing a very important key point.
[05:21] Supply exceeds demand in this area. Meaning there are drastically more buy when there are more sellers. So when looking at this chart you should there are drastically more buyers and sellers. And where are the bad traders buying and selling.
[05:39] If you answer these two questions correctly, you will be a profitable trader. So where are the majority of buyers and sellers? Well we can see from this point on, drastically more buyers then sellers. So we mark the beginning of this move.
[05:56] Where are there more sellers than buyers? Here we have a sharp downwards move. So we mark the begging of this move. I want to make this very very clear. If the chart looks something like this. We don t have a clear area of supply and
[06:09] demand because there are no sharp movements. Sure, the chart moves down from this area. But that just shows there are slightly more sellers than buyers. drastically more sellers than buyers. Which we can only tell, if there
[06:23] because its very important. Then we have to ask the final question. A bad trader is going to sell when there are more buyers than sellers.
[06:36] So we have our supply and demand areas. Wait for price to come to our demand. Set our stop loss below the area of demand. Set our take profit at the area of supply.
[06:49] And we sell to the inconsistently profitable trader who buys up here. video. Here s two extra tips to make your supply and demand zones even stronger.
[07:44] So heres a final recap of the perfect supply and demand trade
[08:14] Here we have a strong move to the upside starting from this candle so we mark our demand zone. Notice how there is also a fair value gap connect to this demand zone. Giving us insight there are buyers than sellers in this area.
[08:28] We wait for price to see what it does next. A similar thing happens up here. This is our area of supply. This move also has a fair value gap connected to it as well. Which is showing there are a lot more sellers
[08:44] Next we want price to slowly come down to our area of demand. Slowly being the key word. Once it hits our zone. We enter. Set our stop loss below the area of demand and set our take profit at the area of supply.
[08:59] And just like that, you got a winning trade. Start looking for areas where bad traders are buying and selling and it will change the way you trade forever.
