CHAPTER 5
What Is the Market and Why Does It Move?
This chapter will begin with a focus on the term “the market” and the numerous ways it is used and what it means in different contexts. Generally, the term means either financial market participants or market price. Ultimately though, when talking about the market, what financial market participants are really trying to figure out is how the market prices will move. The next question then is: Why do markets (and thus market prices) move? There are macroeconomic and microeconomic reasons that govern price changes, and these should be studied and understood. But all the models and analysis in the world won’t change the fact that at the end of the day the forces of supply and demand determine ...
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