Demand is the number that is needed at a certain price , while supply is the number available at a particular price. As market price increase, seller's willingness to get rid of their instrument will also increase. And the other hand, buyers will demand more at lower prices,
In this following example chart, we can see m we have not seen price below 1.530 since July of 2010. There have been many instances in which market price has approached this support level - but this line has not been broken.
Support is the level at which demand starts to outstrip supply , sending market price higher.
Trading Supply Demand using Support Resistance
Trading the Range
When trading a range , Forex trader are anticipating the market price to stay the same , with resistance or support standing its ground allowing for Forex traders to sell high and buy low.
Trading the Breakout
Another strategy is the Forex trader that is expecting the market price to change, with breaks of resistance or support to make new lows or make new high. With this strategy , the Forex trader's system changes from the range trading . The purpose is now to buy high or to sell low.
