📊 Smart Money Concepts | Supply & Demand

skrimon

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🧐What is Smart Money?
Smart money refers to the capital that institutional investors, central banks, and other professionals or financial institutions control. It is run by professional investors who know how to predict market trends and make the most of the money they make. The term "smart money" came from the world of gambling, where it was used to describe gamblers who knew a lot about the game they were betting on or who had access to information that the general public didn't. The idea behind "smart money" is that these investors can spot trends and opportunities before the rest of the market and position themselves in a way that takes advantage of them. They might also be able to influence the market in their favor by making people want to buy or sell certain securities. Some traders try to follow the smart money by looking at public filings, news reports, and other sources of information. However, it's important to remember that not all trades made by institutional investors or large financial institutions are necessarily "smart," and it can be risky to just copy what they do.

🔹 Supply Zone
In trading, a "supply zone" is a range of prices where there are a lot of orders to sell. This means that there is a lot of selling pressure and that the price may temporarily hit a "resistance level." On a price chart, a supply zone is an area where the price has turned around or stopped moving and where there are a lot of sell orders that haven't been filled yet or are pending. When making trading decisions, traders can use supply zones as a point of reference. For example, if the price gets close to a supply zone, traders might think about selling or taking profits on positions they already have. On the other hand, if the price breaks through a supply zone, traders may take that as a sign that the price is going up and buy or add to long positions.

🔹 Demand Zone

In trading, a "demand zone" is a price range where there are a lot of buy orders. This means that there is a lot of buying pressure and the price may be temporarily supported. On a price chart, a demand zone is an area where the price has turned around or found support in the past and where there are a lot of buy orders that haven't been filled yet or are still being processed. For instance, if the price gets close to a demand zone, traders might think about buying or adding to their long positions. If, on the other hand, the price breaks through a demand zone, traders may see this as a bearish sign and decide to sell or take profits on positions they already have.

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Supply and demand is the reasonable context to describe the main factor of the price being moved. In the basic theory economy, high demand will be increasing the price when supply is fixed, however increasing supply will make the price drop if demand is fixed, in the supply and demand theory, there are term equilibrium price where demand and supply is balanced.
 
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