Supply and Demand
The above sections show that there are theoretical prices or relationships for every financial product based on some assumptions about what we have observed in the past. But theoretical analysis is merely that. It doesn’t actually tell an investor what the current market price is. The reason is that theoretical analysis is generally based on historical relationships and historical data. It doesn’t tell us anything about the future. What has happened in the past might influence how an investor feels about the future, but it won’t necessarily tell the investor what will happen in the future. When discussing market views, what people are really talking about is what investors expect to happen to market prices in the future based ...
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