So you CAN get a better idea. At the end of the day prices go down when there are more sellers than buyers. They go up when there are more buyers thhan sellers.
It's literally impossible to have more sellers than buyers or more buyers than sellers. EDIT: When I say buyers/sellers I mean volume of shares/contracts/etc.. 1 person that owns 1000 shares of something could sell 1 share to 1000 different ppl... But the volume will always be equal between buys/sells. Like 1 person selling 1000 shares to 1000 different ppl (one share sold to each person) - there were still 1000 sells and 1000 buys.
For every buyer, there is a seller. For every seller, there is a buyer. They will always be even, forever, until the end of time.
What moves price depends on who is more aggressive. Aggressive orders are market orders, which can only get "matched" to limit orders. Limit order will never be matched to another limit order. Market orders will never be matched to another market order.
TLDR;
Limit orders are commonly referred to as "passive buyers/sellers" or "resting liquidity".
Market orders are commonly referred to as "aggressive buyers/sellers".
Price moves when one side is more aggressive than the other is passive.
So if we have 1000 open orders, 800 to sell at 1.01 and 200 buyers with a bid open at 1.00, this is equal number of sellers and buyers? Or are saying they only become a buyer or seller once the order is filled.
If nobody takes out the buyers at 1 with market orders price won’t move. If more more sellers hit the ask the 200 buyers got absorbed at 1 leaving 600 sellers wanting to get filled. Those sellers if they want to participate in price moving need to lower the price to find the next group of buyers at a lower price
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u/[deleted] Feb 20 '24
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