How are futures markets connected to supply and demand?

Supply and demand can also be connected; there are times when one futures contract might represent an input for another. The futures markets are interrelated and this relationship that can be calculated and analyzed by the fundamental analyst. For example, corn can be used as livestock feed and in the production of ethanol.

What is supply and demand trading?

Over the last few years, “Supply and Demand trading” has become one of the most popular Forex trading strategies, taking the best of support and resistance and combining it with the tried and true concept of supply and demand. “Pin-point EXACTLY where and when the banks are buying and selling.”

How does supply and demand affect the price of gasoline futures?

Where the price of Gasoline futures can be influenced by supply and demand for gasoline and the price of the input commodity. If a trader only focuses on supply and demand for one market, they might miss an important effect from a related market. Economic variables are also very important to the pricing of futures contracts.

What happens when demand exceeds supply?

Once there is an imbalance between buyers (demand) and sellers (supply), we can see markets to trend. When demand exceeds supply, prices are going higher. When supply exceeds demand, prices are going lower. Entering short trades at supply or entering long trades at demand offers the best trading opportunities.