My understanding is that buy orders increase the price of stock and sell Orders decrease the price of stock.

  1. Is this correct?

  2. Aren't more people likely to buy than sell? Aren't there a lot more buyers then sellers? Thus leading to prices just going up?

  • To add to the duplicate - the "price" of the stock depends on what you want to do - if you want to buy the "price" is the ask. If you want to sell the "price" is the bid. If you are just analyzing you can use either, or anything in between (midpoint is common). – D Stanley Oct 5 '17 at 15:25
  • Orders don't change the price, transactions do. – quid Oct 5 '17 at 17:18
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    How could more people buy than sell? Who would they be buying from? – David Schwartz Oct 5 '17 at 17:27
  • So then how can price of stock change? in a question someone says 'The first part "more buyer than sellers" is exactly what I described. The more the buyers, the stock will go up and vice versa.' .. How can there be more buyers then sellers? – excelguy Oct 5 '17 at 19:50
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    The point is that every transaction has a buyer and a seller. The orderbook might have a large volume of orders at some price and/or there may be more buy orders than sell orders in aggregate but ultimately every transaction has a buyer and a seller so there can't be more of one or the other because every transaction has one of each. The price of something changes when a transaction occurs, the last price might very well deviate from the existing bid/ask; but the price quoted is typically the last transaction price. – quid Oct 5 '17 at 21:07

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