Markets work like live auctions where each bid moves the price up or down. A series of higher bids creates a big bullish candlestick. Daily price moves come from liquidity demand and supply, not just buyers and sellers.
Markets work like an auction. Auction market theory is quite an old concept. I'd like to modernize it a little bit, and instead of just auction market theory, I like to call it the liquidity auction theory. Typically in an auction, what you have is the bidders, the rich billionaires in the audience that raise their hand and they want to buy the paintings, and the price of this is $1 million, right? Well, in the middle, there's typically a middleman, right? The auctioneer. A person might come and say, I will accept the ask price of $1 million. Okay, that's the first price. And if we draw a candlestick of the auction, it will start here, right? This is the open. Next guy comes and say, hey, I'll pay $1.1 million. That's the new price. Another guy comes, says, I'll pay $1.8 million. That's the new price. Another guy, $2 million, and so on and so forth, right? That's an auction. So the candlestick of such an auction would be a very big bullish candle. This is exactly what happens in the market every single day, not in the matter of buyers and sellers, but of demand and supply of orders. So this is a demand and supply of liquidity.
