My Trade said that if 1000 traders are on the shortlist, and 100 in Long, the market is growing. First, the facts are not enough, traders may be a different size of the position, I think, with me will not argue if I say that the position size is important? But let’s assume that the size of the position of all the same. Anyway this is madness, the price depends solely on supply and demand at the moment. That is, no matter how many people are sitting in shorts, but how much holding long positions, when they made their deal, only if they were working on the market. Price increases or decreases in time only due to the fact that the market is dominated more willing to buy or sell.
Let’s look at the situation in the hypothetical example, say there is an asset that costs $ 100, the action of a certain company. Suppose at some point there is no trading activity in general, therefore, the issuer is in place. Option 1: The first appears willing to buy stock at a price of 100 dollars, but the sellers at the moment, willing to sell at $ 100 is not the only thing that remains the trader to immediately buy the stock – to raise the price. He offers $ 101, for example, there is a seller who already agree with this price and the transaction takes place, and increases in the price of the issuer. As you can see, this happened due to the fact that now there is a buyer, and that’s why the price has increased. Option 2: The shareholders want to get rid of their papers and put them on sale for $ 100, but not willing to buy, the seller has to sell cut price quotes and begin to decline.
I have outlined above is the only option pricing tools highly, while others simply can not be. It is the law of free market law of supply and demand. It operates everywhere and always under free trade. I can give you an example, not only the exchange of practice, but also retail, real-life example. Take a bread factory, every factory workers produce as much grain as it is usually necessary to sell all of the evening. But once at the factory there is any breakdown in machinery or some other problem, which resulted in the plant can not bake as much bread as he usually bakes for the day. Shoppers snatched the bread at the store, soon to meet its deficit with the situation and be willing to pay more just to buy it. As you can see more than willing to buy the sellers cause prices and vice versa, more willing to get rid of a certain commodity, which is not a special demand, causes a decrease in prices for goods.
Another very interesting example of Alexis, where he talks about the blind and the deaf old man who needs to cross the road and who to see a record of surveillance cameras has determined that at a certain time on the road there are no cars for many years and this is the period when you can cross the road blindly without seeing or hearing. Alex called it absurd, since the old man knows the reason why at this time there are no cars, maybe it’s just a coincidence? If only he had the information that at a certain time each day passes close to the train, causing the machine is physically unable to pass on his street, then he could easily pass. But I will say this is my personal opinion, if for many years, every car, it was at this time does not pass on the road, rather the tendency persists and without knowledge of the reasons why this is happening. In trading, this example is even more successful, if I trade on their trading strategy, which is based on my own observations only for the schedule and I make, why do I mean the reasons why the transaction completed profitably? Statistics must be used when it is in your favor, and do not always make sense to delve into what’s happening.