In trading, demand and supply analysis is the process of trying to predict future changes in price by studying the interaction between traders and recent price action. By understanding how traders buy and sell at different prices, it's possible to get a sense for where the market might be headed next. One way to analyze demand and supply is through order flow. This looks at the volume of trades being made at different prices to try and gauge whether buyers or sellers are in control. If there's more buying than selling, then prices are likely to go up as demand outweighs supply. Conversely, if there's more selling than buying, then prices are likely to fall as supply exceeds demand. Another way to analyze demand and supply is through support and resistance levels. This looks at past levels where price has bounced off of. If there's a surge in demand, then prices will break through resistance levels and keep going up. On the flip side, if there's a sudden drop in demand, then prices will break down through support levels and keep heading lower.