If you want to cash out in the stock market, you need to understand "demand and supply" deeply.

New investors often ask why a stock rises sharply today but drops again tomorrow? The simple answer is supply and demand change. This is a fundamental truth everyone should know before sitting in front of the screen and looking at stock charts.

Rule 1: What is demand and what is supply?

To be straightforward, demand is the number of buyers, and supply is the number of sellers.

When more buyers than sellers, the price goes up. Conversely, if more sellers than buyers, the price goes down. This is a simple game, but it causes people to lose millions of baht every day.

What is the Demand Curve?

This line shows the relationship between price and the quantity that buyers want. When the price is low → people want to buy more. When the price is high → people want to buy less. (This is the Income Effect)

There is also the Substitution Effect - when the stock price rises to become expensive, buyers may turn to buy other stocks that are cheaper.

Factors that cause demand to change:

• Good/bad news about the company
• Earnings that differ from expectations
• Changes in interest rates (If interest rates are low → more investment funds)
• Overall market confidence
• Political and macroeconomic news

Supply Curve: What do sellers think?

Opposite side - this line shows that the higher the price, the more sellers want to sell. The lower the price, the less sellers want to part with their shares.

Factors that cause supply to change:

• Company buyback decisions (Buyback) → supply decreases
• New IPOs → supply increases
• Major shareholders want to sell
• Changes in production costs
• Tax policies and regulations

Equilibrium (: Where should the price stop?

This is the point where the demand and supply lines intersect - the “fair” market price.

If the price is above equilibrium:

• Sellers see high prices → want to sell more
• Buyers see high prices → want to buy less
• Result = surplus of goods ✓ Price adjusts downward

If the price is below equilibrium:

• Buyers see low prices → want to buy more
• Sellers see low prices → want to sell less
• Result = shortage of shares ✓ Price adjusts upward

The market system constantly “tends toward” equilibrium.

What are the key variables in determining demand and supply?

) Financial market demand: Who is buying stocks?

1. Macroeconomic news - inflation rate, interest rate, GDP of the country → directly affects stock demand
2. Liquidity - when the central bank releases more liquidity → investors have more funds to invest
3. Confidence - if the CEO makes good news or Bitcoin prices are high → high confidence → buy more stocks
4. Earnings - if the company is profitable → investors are willing to buy at higher prices

Financial market supply: Who is selling stocks?

1. Company policies - buyback vs. capital increase → affects supply
2. New IPOs - when new companies enter the market → supply increases
3. Production costs - if costs are high → companies want to raise stock prices → people are more willing to buy
4. Regulations - Silent Period after IPO limits sales → supply decreases
5. Exchange rates - if the Thai Baht weakens → import costs rise → bad news for stocks

How do these factors work?

Example: Good economy ###Demand factors( + company buyback )Supply reduction factors( = That stock’s price skyrockets for a small reason because both sides move in the same direction.

Demand, supply, and real market numbers

) Fundamental analysis ###

Stocks are “commodities” by nature, so the laws of demand and supply apply.

When news says “Company ABC expects to grow 50% next year”:

• Buyers want in → demand increases
• Sellers see the stock as expensive → supply decreases
• Result = price increases

Conversely, if news says “Company ABC expects to incur losses”:

• Buyers hold back → demand decreases
• Sellers rush to sell → supply increases
• Result = price decreases

( Technical analysis )

However, the chart lines are different from counting the actual money of demand and supply.

1### Candlestick Pattern

• Green candle (Close > Open) = demand wins → price goes up
• Red candle )Close < Open( = supply wins → price goes down
• Doji )Open ≈ Close( = both sides are equal → price may turn

2) Trend Analysis

• If stocks make new highs repeatedly = demand is still strong → risk decreases
• If stocks make new lows repeatedly = supply is still strong → risk increases
• If price fluctuates in a range = both sides are balanced → wait for new signals

3( Support & Resistance

• Resistance = supply waiting → people are eager to sell here
• Support = demand waiting → people are eager to buy here

How to trade using Demand and Supply Zones in real trading

This is how professional traders operate - find areas where demand and supply are unbalanced, then wait for the right moment.

) Method 1: Demand Zone Drop Base Rally )DBR)

Scenario:

• First: Price plunges sharply → excess supply
• Second: Price stops and oscillates → both sides clash
• Third: Good news comes → demand wins → price breaks upward

Trading method: Buy when the price breaks out of the oscillation zone, with a stop-loss set below.

Method 2: Supply Zone Rally Base Drop (RBD)

Scenario:

• First: Price surges → excess demand
• Second: Price stops oscillating → some investors rush to sell
• Third: Bad news comes → supply wins → price drops

Trading method: Sell when the price breaks out of the lower oscillation zone, with a stop-loss set above.

Method 3: Rally Base Rally (RBR) - Uptrend follow-through

Scenario:

• Price rises → pauses → continues upward
• Meaning = demand is still strong, not letting supply win

Trading method: Buy when the price breaks above the resistance of the oscillation range.

Method 4: Drop Base Drop (DBD) - Downtrend follow-through

Scenario:

• Price drops → pauses → continues downward
• Meaning = supply is still strong, not letting demand win

Trading method: Sell when the price breaks below the support of the oscillation range.

Summary

Demand and supply are not complicated. They are simply about comparing “number of buyers” with “number of sellers.” But this simple concept is what causes many beginner investors to lose money because they fail to see the bigger picture.

Every trader must learn:

• What factors drive demand
• What factors drive supply
• Where is the equilibrium point
• When will the imbalance “explode”

This theory is simple but requires practice to use effectively — look at Bitcoin, Gold, or SET Index prices to see real demand and supply in action, then understand where the “price is heading” rather than just “where the price is going.”