Psychological interpretation of supply and demand theory in the forex market

Psychological interpretation of supply and demand theory in the forex market

I do not hope to mention that the people who move the markets in trading are us, you and me, and they. 

Taking into account that those who control the markets are the ones who made it from the beginning for their own benefit, and the economic principle does not hide from you the circulation of assets freely and the creation of a global commercial reciprocal movement to fill the shortage of commodities Or products that are not available from a specific party.

If you are convinced of this principle, you will be relieved from the trouble of catching up with the stick candles on the currency chart or the indicator arrows.

The concept of buying and selling in its simple case is an exchange in order to meet the need. I buy wheat from another person to make bread, and this person buys rice from me to cook it. He owns the wheat and I own the rice.

Diminishing marginal utility

It is one of the most important economic principles .

The law of Diminishing Marginal Utility posits that with the more and more consumption of the units of the commodity the utility derived from each successive unit goes on diminishing, provided the consumption of other commodities remain constant.

Thus, the law of diminishing marginal utility holds universally, for both the durable and non-durable goods. In certain conditions, such as accumulation of money, a hobby of collecting old coins, stamps, visiting cards, etc. the marginal utility might initially increase, but eventually, it starts declining.

In order to understand the market movement, put this simple principle in your mind. 

Market makers are subject to this principle unconsciously, according to the formation of the human soul.

They bought commodities or the like for a cheap price in order to sell them when

Their price goes up, their goal is profit, nothing more.

So what happens I don't understand anything?

People buy things cheap and sell them when the price goes up.

 What is the relation between this and diminishing marginal utility?

Whoever buys commodities from them, you and I, and they, and when we meet our needs from them, we renounce them, and accordingly we refrain from buying them, and languish with the merchant, who in turn gets rid of them at a low price, and so on.

I hope you got the idea

Follows the application of what I mentioned on the forex chart