Mahan_Mahmoudi

Prices don't go up because of more buyers

Education
BINANCE:BTCUSDT   Bitcoin / TetherUS
Prices go up because there is an aggressive increase in buy market orders and prices go down because there is an increase in sell market-orders.
Prices don't go up due to more sellers, an imbalance in the market can't exist.

Summary:
Buy Market Orders buy from sell limit orders. By doing that they buy the cheapest price someone else is willing to sell them for.
Sell Market Orders sell to buy limit orders. By doing that they sell to the highest price someone else is willing to buy them for.
Sell Limit Orders mean that the market participant seeks to sell his shares at a set price above the current price. It could happen that his order never gets filled.
Buy Limit Orders mean that the market participant seeks to buy his shares at a set price below the current price. It could happen that his order never gets filled.

Note: If the price of stock x is at 1€ and you seek to buy it at 1.20€ (for whatever reason) with a buy limit order, most exchanges will execute a buy market order for you.

Conclusion: The Stock Market, in particular, is a market of market participants each buying and selling at different and in most cases with the same intention in mind - which is to make a profit.


I would like to add that I summarized the fundamental structure of an exchange and didn't go into detail.





Comment: ... is a market of market participants each buying and selling at different PRICES* and in most cases with the same intention in mind ...

Comments

nice post!!! Guess you meant Sell Market Orders sell to buy limit orders "and also to buy market orders". By the way, you are making a good point here saying buyers and sellers are always constant but you are missing one important detail deserved to be mentioned...which is that prices dont go up because of more buyers but because of more buy market orders "derived from ( "new" buyers orders - organic growth and also old buyers accumulating even more - institutional driving price up...)"
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