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Trading 101: How is a Stock's Price Determined? - YouTube
Channel: ClayTrader
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now I've done videos on how to make
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money from stocks how a stock works but
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never who exactly is determining the
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price of a stock the value of the stock
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let's take a look at that
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I want to just give credit where
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credit's due I did not come up with this
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idea
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thanks to you as viewers somebody left a
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question and as obvious as it is to me
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something that's been in the market a
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long time when I put myself in something
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else you say oh you know what that that
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makes good sense
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so let's first just get to the comment
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that was made and then we're going to
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tackle this right off the get-go so Azra
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Aziz oh sorry if I mispronounced your
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name asked who determines the value of a
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stock so yeah how is this price being
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determined and when I say this next part
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please don't turn off the video I
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promise I'll try to boil it down and
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make it half way entertaining but at the
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end of the day it's all about this right
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here and if you've ever taken an
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economics class then you've heard a
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supply verse demand and that is how a
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stock is being you know price how the
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value is being determined but let's not
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look at it as supply and demand
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let's look at it in a much more
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practical way and we're going to call
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supply give right if you want to give
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something to somebody another way you
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could say that it's here I'm going to
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supply you with this I mean I want to
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give it to you so supply associate with
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give and then demand there's a one I
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demand what I demand you give this to me
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right you want something that's what a
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demand is like when a in a hostage
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situation a person taking the hostage is
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making demands meaning they want
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something in and you know in regards to
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the hostage so forget supply and demand
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I mean these are just boring in economic
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terms let's just look at things in terms
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of give and why and my idea here and my
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goal is to hopefully insult your
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intelligence be like a thanks Captain
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Obvious that's that's yeah thanks thanks
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a lot so let's just quickly hop into
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this hopefully this video shouldn't be
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that long but if a lot of people want
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something so a lot what is that going to
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do to a price of something if a lot of
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people want it like just I want it I
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want it there's all sorts of people that
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want it that's going to cause what
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prices to go down if a lot of people
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want to buy something or prices to go up
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it's going to cause prices to go up
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right because a lot of people want it on
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the flip side what happens if there are
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a lot of people that want to give
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something I don't want that I don't want
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that here let me give it to you let me
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give it you everybody wants to give you
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something or in other words you know I
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really just want to sell something get
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rid of it give give give what is it
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going to do to the price of something if
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everybody just wants to give it you know
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sell it get rid of it well a lot of
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people want to get rid of something give
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it what prices are going to go down
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right and let's apply this to the world
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of stock market if a company researcher
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you know a company if you watch my past
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videos you've heard me talk about pizzas
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an example so let's say a company
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specializes in pepperoni pizza I've used
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this before and a study comes out that
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says pepperoni is the worst thing ever
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invented if you eat it you're for every
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bit of pepperoni you're going to lose
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three years off your life what do you
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think is going to happen to the price of
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a company that specializes in pepperoni
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pizza are people going to wanna what
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those shares are people going to want to
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start to give them sell them sell them
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well of course who is going to want to
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hold on to a share who's going to want
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to hang on to something that has been
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proven now to be super unhealthy for
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people so of course people are going to
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want to give it get rid of it or you
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know trading lingo sell it and when a
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lot of people want to sell that's prices
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are going down on the flip side if
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something comes out pepperoni pizza add
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three years to your life for every piece
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that you eat what are people going to
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want to do as far as companies that
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specialize in pepperoni
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they're going to want hey I want a part
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of that I want those shares I want to
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get involved wat wat wat wat what a lot
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of people want to get involved what is
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that going to do those the prices ton of
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people want it those prices are going up
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so what determines the value of a stock
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well just how many people want to give
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it or how many people want it and that's
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it the more people that want the higher
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prices are going to go the more people
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that
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give the lower prices we're going to go
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that's what supply and demand it and
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it's a constant battle prices are always
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changing and the different prices are
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going to you know determine and they're
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going to fluctuate all the time you can
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watch the video that I did kind of
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entitled the ultimate game and that kind
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of maps out the whole question which
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revolves around supply and demand and
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you know why you got to be pretty witty
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and why you got to be pretty good at
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determining things because you're always
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trying to figure out when is the watt
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going to overwhelm the give when is the
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give going to overwhelm the lock and
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that's what trading is we'll put a link
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to that video down below but that's
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what's going to determine the value of
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the stock the market itself how many
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people want the stock or how many people
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want to give it how many people want to
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sell it or in other words going back to
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supply to somebody else you know I just
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don't want that stock anymore so
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hopefully that answers your question and
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hopefully that just gives you a good
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idea of what exactly and how exactly a
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value of a stock is being determined
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