Forex

traders at a seminar, "What is price?" some answer, "Price is a
perceived value." Others say, "Price is what a person at one particular point
in time is willing to pay another person for a commodity." Someone says,
"Price is what the last person paid for it. That's the price right now." Another
suggests, "No, it's what the next person will pay."
Traders who cannot give a clear definition of price do not know what they
are analyzing. Your success or failure as a trader depends on handling
prices-and you had better know what they mean! Some attendees at the
seminars I give become agitated as they search for an answer to a seemingly
obvious question. Arguments fly back and forth, as in this discussion:
I'll give you the worst-case example. In the 1929 crash, Singer stock was
selling for $100 and all of sudden there's no bid, no bid, no bid, and
somebody comes forth-"I gotta sell, what am I bid?" and one of the
floor clerks said "one dollar" and he got it. He got the stock.
Price is what the greater fool is ready to pay.
Take the '87 market. All of that 500-point decline - stocks weren't worth
any less after the decline than before. So it was the difference in the
perception and the willingness of the next person to pay for it.
You might carry that one step further. What you're paying for is absolutely
worthless. It is just a piece of paper. The only value that it does
have is the intrinsic dividend value, compared to government paper at
that time.
It still has the value of whatever anybody will pay you. If no one wants to
pay you for it, it has no value.
It'll pay you for a yield.
What if you trade soybeans? You can eat them.
How about a stock that has no yield?
But doesn't it have assets?
The company that issued the stock has value, cash flow.
I give you one share of IBM; if no one wants to buy it, you can light a
cigarette with it.

There is no such thing that no one wants to buy IBM. There is always a
bid and an ask.
Take a look at United Airlines. One day the paper says it's $300 and the
next day it's $150.
There's no change in the airline, they're still making the same cash flow,
they've still got the same book value, and the same assets-what's the
difference?
The price of stock has very little to do with the company it represents. The
price of IBM stock has very little to do with IBM. As I visualize it, the
price of stock is connected by a mile-long rubber band to IBM and it
can be wildly higher and wildly lower-IBM just keeps chugging
along and it's a very, very remote connection.
Price is the intersection of supply and demand curves.
Each serious trader must know the meaning of price. You need to know what
you analyze before you go out and start buying and selling stocks, futures, or
options.