The Force: Quantity & Volume

The Force That Matters

Buying and Selling Forces

Force is defined as the combination of all buyers (or all sellers) and the capital each group is willing to use to implement its buying (or selling).

To understand which direction a market or an item's price is likely to trend we can use the concept of buying and selling forces.

Force is actually a net, or combined force, and may be represented as:

Force = ( {Quantity of Participants} + {Volume} )

Where,

"Quantity of Participants" represents the count of players in any period;

"Volume" represents the buying or selling power of the participants directly proportional to the buyer's or seller's capital available to participate in the market.

For example, it takes fewer big participants (not many individuals, but each has relatively large capital to invest) to move a market than many small participants. But when many small participants grow into a large number of small participants, they may overcome the few large participants. And when the few big participants become many big participants, they are likely to overcome the many small participants. Of course, the actual numbers of participants and dollars available need to be applied to this concept.

In these cases market momentum shifts from a buying trend to a selling trend or vice-versa. The direction will depend upon the net force of the participants and their capital.

Markets and items may be analyzed by attempting to consider the buying force separately from the selling force and then combining these to realize a net force. There are charting services that attempt to measure these money flows and forces and provide the results as propriety information.

See also: Obfuscation

The investment axiom that is always valid: Caveat Emptor

UnderstandingMarkets.com is offered only to provide thoughts, observations, comments and opinions. Visitors should understand that it is the wide variety of thoughts, observations, comments and opinions that "make a market".
Always use caution before and after making an investment. Always watch your investments and know who and what sources to trust --- and not trust.

UnderstandingMarkets.com is offered strictly to provide thoughts, observations, comments and opinions. UnderstandingMarkets.com reserves the right to edit, reformat, modify and reject any submitted information to improve communication between users. UnderstandingMarkets.com is intended to be used for general & professional observations. UnderstandingMarkets.com will not post submissions of a personal or psychological nature.
Users of UnderstandingMarkets.com agree to hold harmless UnderstandingMarkets.com, all employees and affiliated individuals. Neither UnderstandingMarkets.com, its employees, nor affiliated individuals makes nor implies any promise of reward to any user of this site. Each user understands and agrees that no promises nor prizes will be awarded nor issued by UnderstandingMarkets.com.
All submissions become the property of UnderstandingMarkets.com.