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Lesson 3 of 14 · 2 min

Why price moves

Price moves when one side is more eager than the other. That's the whole idea, explained without jargon.

Price doesn't move because of news, indicators or "the market wanting to go up". It moves because of who is in a hurry.

The eager side wins

At any moment there are people waiting (resting bids and asks) and people in a hurry (market orders).

  • If eager buyers keep taking every ask at the current price, those sellers run out. The next trade has to happen one price higher. Price ticks up.
  • If eager sellers keep hitting every bid, the buyers at that price run out. Price ticks down.
Buyers keep lifting the ask sellers step back → price ticks up Sellers keep hitting the bid buyers step back → price ticks down
Price steps up when eager buyers use up the sellers at each price, and down in the reverse case.

Waiting matters too

It also matters what the waiting side does:

  • If sellers step back (pull their asks), even a few buyers can push price up quickly.
  • If a big seller keeps refilling the ask, buyers can trade a lot of contracts there and price still won't go up.

So a move is a contest between how eager one side is and how much the other side is willing to absorb.

What about news?

News matters because it changes who is eager. A surprise inflation number can turn thousands of traders into eager sellers in one second. The mechanism is the same: more aggressive sellers than willing buyers at that price.

Keep this in your head

Every move you'll ever see on a chart is this tug-of-war, repeated tick after tick. Later tracks (Microstructure, Orderflow) show you how to watch it happen.

Quick recap

  1. Price moves when one side is more eager than the other.
  2. Waiting orders being pulled or refilled change how far a push gets.
  3. News moves price by changing who's in a hurry.

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