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Wolfofukraine

02/14/17 1:03 PM

#46035 RE: BARRENCE #46029

Lol first time trading here? His comment is valid. Simple mathematics lol.

Wolfofukraine

02/14/17 1:06 PM

#46036 RE: BARRENCE #46029

You are right for every trade to take place there has to be a buyer and a seller, so essentially on the trade the number of buyers and sellers would be the same.

However, what one means when there are more buyers than sellers is that the quantity of buy orders is more than the quantity of sell orders. This indicates that more people want to buy a particular share and few people are ready to sell. Let's see for an example share XYZ:

Buy Quantity / Price || Sell Qty / Price
20 / 5.30 || 15 / 5.35
15 / 5.25 || 10 / 5.40
25 / 5.20 || 10 / 5.45
40 / 5.15 || 10 / 5.50
Given these orders, there will be no trade; i.e. the maximum a buyer is ready to pay is 5.30 and the lowest the seller is ready to sell at is 5.35.

However if you look at total order quantity, there's around 100 to buy compared to 45 to sell, meaning that quite a few are interested in XYZ stock and the chances are high that some may sooner or later be more willing to pay 5.35 or 5.40. However, if it was the other way around, with more sells than buys, it means more people are ready to sell and the price may move down.