WEBVTT 00:09.470 --> 00:12.950 I once had a conference about forex trading. 00:12.950 --> 00:19.940 It was a free event organized by a broker and they asked me to talk about Forex charts. 00:19.940 --> 00:26.650 I remember that I pointed the chart on the wide screen and I asked: "what do you see?". 00:27.200 --> 00:30.690 I got the same response: a chart. 00:30.710 --> 00:32.630 I also heard someone laughing 00:32.630 --> 00:36.440 to be honest. The question maybe seemed to be too easy. 00:36.980 --> 00:40.830 So I asked: "if you focus more on the chart, 00:40.970 --> 00:47.000 what do you see?" Someone started to be interested and tried to listen carefully. 00:47.000 --> 00:50.740 Someone else suggested candlesticks instead. 00:51.050 --> 00:52.790 Well that's correct. 00:52.790 --> 00:58.900 So once again I asked: "if you focus on the candlesticks, what do you see? 00:59.420 --> 01:01.210 Ten seconds of silence. 01:01.220 --> 01:08.330 Questions started to seem harder and no one had any idea of where I was going with my questions. 01:08.330 --> 01:14.010 Someone said that we could see price movements focusing on the candlesticks. 01:14.270 --> 01:15.230 And that's correct again. 01:15.230 --> 01:22.650 I was quite proud of people there, they were right about the first three answers: chart, candlesticks 01:22.700 --> 01:24.520 and price movements. 01:24.560 --> 01:31.430 Unfortunately the last one is the decisive one to understand forex market and to make money out of 01:31.430 --> 01:32.380 it. 01:32.420 --> 01:38.180 So I asked: "if you focus on price movements, what do we see?". 01:38.510 --> 01:47.150 Again ten seconds of silence followed by someone who tried to give very exotic answers but there's only 01:47.150 --> 01:52.510 one answer to this question and it is supply and demand. 01:52.780 --> 01:57.960 What you see on your charts is the result of supply and demand principle. 01:58.130 --> 02:06.590 In other terms if demand exceeds supply the total trading volume of buyers is greater than the total 02:06.590 --> 02:11.090 trading volume of sellers causing the price to go up. 02:11.090 --> 02:19.370 Conversely if supply exceeds demand the total trading volume of sellers overcomes the trading volume 02:19.430 --> 02:27.200 of buyers causing the price to go down. When supply and demand are equal the price will not have 02:27.200 --> 02:28.390 any direction. 02:28.390 --> 02:31.280 That's the case of a sideways trend. 02:31.340 --> 02:39.800 The supply and demand law is valid for any financial market and sometimes not only for financial markets. 02:39.800 --> 02:44.450 Let me give you an example from daily life experience. 02:44.510 --> 02:49.220 Let's go on Amazon UK and search for a GoPro Hero 5, 02:49.340 --> 02:58.820 that is a camera that I bought on the 10th of June. So it is the first one, I click on it and then I use 02:58.820 --> 03:01.730 an extension of chrome that I have. 03:01.730 --> 03:09.710 It is called Camel camel camel and it allows you to check the recent prices for items on Amazon. 03:09.710 --> 03:13.300 I want to have a closer look on the Website so I click here 03:14.790 --> 03:19.270 and here we have the product on camel page 03:19.320 --> 03:23.660 and I want to focus on the last three months. 03:23.930 --> 03:30.770 So here we have a chart that shows the price for the GoPro hero five on Amazon for last three months. 03:30.770 --> 03:32.680 I bought go pro on the 10th of June, 03:32.690 --> 03:40.820 so approximately here and if you go a few days back you can see that the price was around 350 £360 and 03:40.820 --> 03:43.790 then it went dramatically down. 03:43.790 --> 03:46.070 Now what happens with the price here. 03:46.070 --> 03:52.070 It happens that people start to think that the price of the GoPro is very convenient so they start to 03:52.070 --> 03:53.610 buy the GoPro. 03:53.690 --> 03:59.600 It is something that I actually did by myself, I wanted to buy a camera and I saw the GoPro at that 03:59.600 --> 04:03.980 price and I felt that it was very convenient and I bought it. 04:04.100 --> 04:10.730 So many people bought the GoPro in that period and they increased the demand for that item pushing the 04:10.730 --> 04:12.500 price up. 04:12.500 --> 04:18.950 This was a simple example on Amazon, just to give you an idea of how supply and demand work with something 04:18.950 --> 04:20.550 material. 04:20.570 --> 04:26.750 Make sure you understand this concept because all the course is built on the supply and demand law and 04:26.750 --> 04:29.560 the fight between buyers and sellers.