When you place a trade, you’re notionally either ‘buying’ or ‘selling’ a financial asset. Buyers – also known as ‘bulls’ – believe an asset’s value is likely to rise. Sellers – or ‘bears’ – generally think its value is set to fall.
How do buyers and sellers affect the markets?
At any given time, one group tends to outweigh the other, and that’s one of the reasons the price of a market fluctuates.
When the buyers outweigh the sellers, demand for the market rises. As a result, the price of the asset climbs.
When it’s the other way round, supply increases and demand for the asset starts to drop – and the price falls.