26/03/2019

What Are Bid and Ask on the Stock Exchange?

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Analyzing bids and asks can be very useful in identifying price reversals. However, before delving into these concepts, let’s revisit the fundamental principles:

Supply is a quantity of goods a seller wants to sell.

Demand is a quantity of goods a buyer wants to buy.

The supply and demand law: “all other conditions being equal, the lower the price, the higher the effective demand is and the lower the supply is”.

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