Who decides the prices?

<p>Market prices are dependent upon the interaction of demand and supply. &nbsp;The Forex rates/prices are decided either by the market's demand and supply forces or by a central bank.</p>

<p>Perceived value of an asset by everyone. Institutional players, banks, traders, All of them.</p>

<p id="isPasted">No single entity or person decides trading prices. Instead, prices are determined by the collective actions of all market participants through the constant interplay of supply and demand. Prices change based on what buyers are willing to pay (the bid price) and what sellers are willing to accept (the ask price) at any given moment.&nbsp;</p><p><strong>Key players that influence trading prices</strong></p><ul><li>Market Makers: These are firms or individuals who provide liquidity to the market by continuously quoting both buy (bid) and sell (ask) prices. They profit from the bid-ask spread and help ensure a smooth, efficient market.</li><li>Traders and Investors: The decisions of all market participants, from large institutional investors to small retail traders, influence prices. For example, a high volume of buying activity will drive demand and increase the price.</li><li>Companies: A company's performance, management decisions, and future outlook all influence how investors perceive its value, which affects demand for its stock. Positive earnings reports tend to increase stock prices, while negative news can cause them to fall.</li><li>Stock Exchanges: Exchanges like the BSE and NSE provide the platforms where buyers and sellers meet. They use a matching system to pair buy and sell orders, which determines the current market price.</li><li>Regulators: Regulatory bodies like SEBI in India oversee the market to ensure fairness and prevent manipulative practices. This helps maintain investor trust and supports orderly price formation. </li></ul><p><strong>Factors that influence trading prices</strong></p><ul><li>Supply and Demand: The fundamental economic principle where prices rise when demand exceeds supply and fall when supply exceeds demand.</li><li>Economic Indicators: Macroeconomic trends, including inflation, interest rates, and GDP growth, impact investor sentiment and influence market-wide price movements.</li><li>Market Sentiment: The overall mood of investors can drive prices. Positive news can create a "bullish" trend, while panic can cause prices to fall in a "bearish" market.</li><li>News and Events: Company-specific announcements, political developments, or natural disasters can instantly affect investor perceptions and cause immediate price swings.</li><li>Liquidity: How easily a security can be bought or sold also affects its price. Highly liquid stocks are more responsive to news, while less liquid ones can experience stable prices due to a lack of trading volume. </li></ul>