Have you ever wondered why stock prices suddenly shoot up or crash down? The answer lies in demand and supply—the core principle of the stock market. Big institutions use this principle to control prices, and they need liquidity (which comes from retail traders like you and me) to make it happen. At [Your Institute Name], we teach you how to spot these institutional moves in our Best Stock Market Course in Jaipur. Let’s break it down with examples.
Demand and Supply: The Basics
In simple terms:
- Demand: When more people want to buy a stock, the price goes up.
- Supply: When more people want to sell a stock, the price goes down.
But here’s the catch: Institutions control demand and supply to move prices in their favor. Let’s see how.
Example 1: How Institutions Create Demand
Let’s say an institution wants to buy a large quantity of HDFC Bank shares. If they start buying all at once, the price will shoot up, and they’ll end up paying more. So, here’s what they do:
- Step 1: Create Panic Selling
The institution starts selling a small portion of HDFC Bank shares to create panic. Retail traders see the price dropping and start selling too, thinking the stock is weak. - Step 2: Accumulate at Lower Prices
Once the price drops to a desired level, the institution starts buying heavily. This creates demand, and the price starts rising again. - Step 3: Retail Traders Join the Rally
Retail traders see the price rising and start buying, thinking it’s a good opportunity. This further increases demand, and the price shoots up.
In the end, the institution makes a profit, and retail traders are left holding the bag.
Example 2: How Institutions Create Supply
Now, let’s say an institution wants to sell a large quantity of Reliance Industries shares. If they sell all at once, the price will crash, and they’ll get less money. So, here’s their strategy:
- Step 1: Create Hype
The institution starts buying small quantities of Reliance shares, creating a sense of demand. Retail traders see the price rising and start buying too, thinking it’s a good investment. - Step 2: Sell at Higher Prices
Once the price reaches a desired level, the institution starts selling their shares. This increases supply, and the price starts falling. - Step 3: Retail Traders Panic Sell
Retail traders see the price dropping and start selling too, further increasing supply and crashing the price.
Again, the institution makes a profit, and retail traders suffer losses.
How Retail Traders Can Spot Institutional Moves
At [Your Institute Name], we teach you how to identify these institutional strategies so you don’t fall into their traps. Here’s what to look for:
- Volume Analysis:
Institutions need large volumes to move prices. If you see unusually high trading volumes, it’s a sign of institutional activity. - Price Action:
Look for sudden price spikes or crashes without any news. This is often a result of institutional manipulation. - Support and Resistance Levels:
Institutions often push prices to key levels (support or resistance) to trigger stop-loss orders or create panic.
Why Learn Institutional Strategies?
By understanding how institutions control demand and supply, you can:
- Avoid falling into their traps.
- Spot opportunities to ride their moves.
- Protect your capital and make smarter trades.
In our Best Stock Market Institute in Jaipur, we teach you these strategies step-by-step, so you can trade like a pro.
Call-to-Action (CTA)
Ready to decode institutional moves and take control of your trading? Join our Best Stock Market Course in Jaipur today!