What Moves a Market: Orders, Liquidity & Price
Price isn't a number that drifts around — it's the result of orders meeting liquidity. Understand this and most chart behavior stops looking random.
Before indicators, strategies, or bots, you need one mental model: price is just the most recent point where a buyer and a seller agreed. Everything else follows from that.
Two kinds of orders#
- A market order says "fill me now, at whatever price is available." It takes liquidity.
- A limit order says "fill me only at my price or better." It provides liquidity and sits in the order book, waiting.
Price moves when market orders eat through the resting limit orders. When buyers are aggressive enough to clear every sell order at the current price, the next available price is higher — and that's a tick up.
Liquidity is why slippage exists#
A "liquid" market has tons of resting orders at every price, so even large trades barely move price. A "thin" market has gaps — one decent order can jump price several levels. This is why the same strategy behaves differently on EUR/USD versus an obscure altcoin.
You are never trading "the market." You are trading against the specific orders sitting on the other side right now.
What this explains#
- Support and resistance are just price zones with lots of resting orders.
- Breakouts happen when those resting orders get cleared out.
- Spikes happen when liquidity is thin and a large order has nothing to absorb it.
Next#
Now that you know what moves price, learn how to survive it: Risk First — Position Sizing & Stop Losses.