Shortcomings of Supply/Demand Theory
(2010-05-30 21:51:55)
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Shortcomings of Supply/Demand Theory
Supply/Demand Theory has nothing more than selling supply drives price down and buying demand boosts it up.
It perfectly describes what consistenly happens on the market.
However, more essential and fundamental are:
1, why is there such supply or demand?
2, who does the supply or demand?
3, how is it done?
4, how to profit from the reading?
Supply/Demand Theory is just a right way to depict and record what has happened on the market.
While the utmost truth is who are selling/buying and why and how they do.
Every trade happens between two sides who are human beings. The market is just a place designed for people to perform agreed transactions. Price and volume are merely records what people have done.
The always research focus is people and then how they trade.
Deviation from such understanding is doomed to failure.