How Prices Form — and What Moves Them
Before you trade, it helps to understand where a price even comes from. This series explains, step by step and jargon-free, how prices are formed across stocks, crypto, currencies, and options.
Three principles that apply to every market
A price is an agreement
The price you see is simply the last price a buyer and a seller agreed on. It is not a “true value” — it is a compromise that is renegotiated tick by tick.
Expectations move markets, not facts
Markets trade the future. A price moves when reality differs from what was expected — not when good news arrives that everyone already anticipated.
Liquidity sets the speed
Where many buyers and sellers are active (high liquidity), prices move smoothly. Where few trade, even a small order can cause large jumps.
Choose a topic
Each page stands on its own. If you are brand new, start with supply and demand.
Supply, Demand & Order Flow
The foundation of every price: how buyers and sellers meet in the order book and settle on a price.
StocksWhat Moves Stock Prices?
Earnings, expectations, interest rates, and sentiment — the forces behind rising and falling shares.
CryptoWhat Moves Crypto Prices?
Why Bitcoin and friends swing so hard: scarce supply, liquidity, narratives, and 24/7 trading.
ForexWhat Drives Forex Rates?
Interest-rate gaps, inflation, trade balances, and central banks set the price of a currency.
OptionsHow Options Prices Work
Intrinsic value, time value, and volatility: why an option costs what it costs.
Where to go next
Once you understand how prices form, the next steps make a lot more sense: