Market Discussions

Hey there New Eden,

I'm a full time commodity trader and part time eve fanatic looking to put together a small cadre of professional traders to approach the Eve markets from an analytical perspective. My thoughts are as follows:

Market synopsis
Arbitrage: beat to death
Market making: some value but crowded
Spec trading: lots of room
Analytics: nothing good (and public) from what i've seen

The plan:
Phase 1: moderately sized prop fund to test concept and build analytics
Phase 2: public hedge fund and a few index funds (long and short)

I'm currently putting together a sql database to underpin a basket of fundamental and price related trading tools. I'm also quite excited at the lack of a regulatory body in the eve markets >wink<. Shoot me a note in game if you've ever sat on a real world trade desk and you're interested.

As well as VV, who went from Eve trader to RL trader, there are a couple of others I know of who do some form or other of RL trading

Market making depends on your definition of it.

The market is far from saturated, and there is plenty of opportunity for creation of markets, provided your scope of imagination extends beyond trade hubs, but even there there is scope.

Arbitrage is not 0.01ing in jita, but buying at jita sell and selling for vastly higher in a separate market (ties in with market making),
Most people consider these two to be too much effort.

You can sort of take positions, by bulk purchasing in advance at a fixed price, with the repayment to be made at a set future date. This however, is not done between randoms. You can also do this by placing bulk purchase orders, via WTB contracts with a set price (set at the days market price, delivery to be made in 2 weeks for example). This can be done between randoms, but is more usually done with contacts you already know.

Speculation is of course, the most obvious, and the favourite among traders, its not my sort of trading, but lots of people seem to enjoy it.

You can without equivocation act as a functional equivalent of a RL hedge fund in terms of being a market actor. "Hedge fund" is an unfortunately sticky misnomer, much like "game theory", where the actual concept identified has long since expanded beyond the confines for which it was originally named.

It's the lack of legal enforcement that makes the idea of an actual Eve hedge fund farcical, not the lack of superfluous financial instruments.

It's not about being offended, it's that some people, like Ester, are inclined to be assholes.

You don't have to worry about the feelings of people like that. Please save your energy for responding to useful posts.

I like your ideas and want to read more of the interesting stuff.

#nomad

action trding was a term I picked up from VV's blog, basically taking a long position on a commodity. As to the rest, thats a lot of butmad for no reason, same as the white knighting assuring your ego that it's ok. But to why this post (not you, your post, your ego is safe)

You want to create a fund... but made no mention how you are going to avoid the fund owner from just taking it all and running at a certain point, like every homoegnized fund in the last 10 years here. Basically you want a loan, with no collateral, good luck with that. then you want to index funds. Basically treating the market like a stock market. PROTIP, it's a commodities exchange, not a stock market.

then theres this:

I'm currently putting together a sql database to underpin a basket of fundamental and price related trading tools. I'm also quite excited at the lack of a regulatory body in the eve markets >wink<. Shoot me a note in game if you've ever sat on a real world trade desk and you're interested.

a basket of trading tools? Why make an SQL database of the, maybe 5 tools out there. I took 30 minutes and made a blog entry on them, it sounds like you are making busywork, and why do it at all? Even the wiki here has already done that. Then your wink to the lack of regulatory bodies etc.

The last time that made a difference was with CFC, and their market manipulation in FOREX, turning ISK into unlimited LP, based on a flawed bounty mechanic, and the OTEC cartel price rigging moongoo setup. Unless you deal in the hundreds of billions, I have a hard time believing you have the resources, or the knowledge to move price on something in game any direction but down. And since traders don't control means of production, I kind of doubt anything there as well.

So yeah, I'm going to be blunt, direct, and curt with you, because this idea is horrible, poorly thought out, and should be a case of you 'killing your darlings' and not just sarcastically dismissing this as a troll hating on the wonderful plan.

If you really want to get into real world, go check out vanroks blog, he talks about long positions very in depth, and take some time to really learn it. It will take time and hard work, not an SQL database. If you want simpler, merchant monarchy, markets for isk, and eveplex all talk about station trading, arbitrage, and industry + trading in a nice narrative, pseudo research format.

Anyways, good luck with whatever the **** the plan is (because you still never talked about a direction for all this, I assume make ISK, but "there is no SEC" :wink: isn't the most descriptive plan ever. I don't think you are a scammer, which is unfortunate, because at least this nonsensical idea would have some merit if it was made to make idiots give you money

I think if you're approaching it from the perspective of an interesting experiment with a little "role-playing" flavour, then more power to you, though I'm pretty confident that you'll get bored and burn out from the pointlessness rather quickly.

That said, if you truly want to emulate the core principles of a trader in Eve, then the best thing to do is forget all you know about fancy advanced techniques used in the real world, and apply those most elementary ideas to the vastly different landscape that is Eve (which is what most of us do). For example, the greatest returns in "trading" are usually from the massive price swings caused by developer alterations to the game, even more so by guessing what the speculator lemmings will do and extracting even greater profits from that. So while you're making input/output charts and painstakingly gathering huge reams of information, other people are making absurd returns by following developer blogs for five minutes each morning over coffee. Therefore, while you may be emulating the superficial actions of real world traders, real Eve traders are better emulating what real world traders are actually doing, which is maximizing profit based on the available information and the existing "legal" or structural framework.

The first thing a truly "professional" trader in Eve would do is the exact opposite of what you're doing; again, given the disclaimer above about doing whatever floats your boat in a stupid video game.

FTFY

couple questions... prop fund doesn't really sound like someone trading with their own money at all. Clearly I'm ignorant to what real prop funds look like. I tried to glean that info from your posts, but it's hard to tell if you want, or don't want to have a collective fund from members, might want to clarify that for the ignorant masses like me.

And thanks for the shoutout, didn't know I should have gone for your job when critiquing someone elses plan for an uncollaterized loan, whose ego bruising aparently had AOE effect. You're not the only one spouting nonsense here. CCP used to have fundamentals, it was called the QEN. And I would love index funds tied to things, but until theres a way to prevent it from being stolen by a single individual, it aint happening.

And I do like the idea of a supply and demant program, I don't think it's feasable, theres just too much obsfuscation from CCP. The best you could do is scrape killboards, , check volume changes in the main hubs over time, compare to the mineral price index, and factor in hoarding of modules and ships (either personal hangars, unsubs etc) It would be horribly inaccurate IMO, since unlike the real economy, people don't often just check out and take chunks of the economy with them, and randomly return at unknown rates. TBH, you're better off petitioning CCP for some data, and using that.

Now since it says you've been playing since 2009, you've been around for a few 'funds' and 'banks' so you should know it can't be done, it's been proven time and time again, unless you can match it dollar for dollar, and leave with Chribba, at which point, what would be the point of teaming up at all? As soon as it becomes successful, scammers exit out, and honest people either trust the wrong person, or turn to the dark side. I'd be more inclined to trust your idea if you had a history trading in Eve. Mine isn't stellar, but it's there, warts and all. Now granted, I'm not the king of trading, but I do OK, everyone can see right now my net worth and income, as well as my mistakes. People have been burned before by just trusting someone on the internet because they promise to be an expert.

No ones feelings are hurt, the idea is poorly thought out is all, and the constant assumption of anything else is just ego protection.

Hello,

since I got mentioned - along with my threads and blog, I'd like to bring back one in topic article that imo has value.
It's Samroski's still valid study on EvE markets correlations, which is preliminary to an hedge fund.

In turn, that article was made after another article of mine that theorized the phenomenon would also happen in EvE.




Price action trading is a term whose true fathership I don't know. A prominent and classic proponent of the study of price "motions" would be Martin Pring. His books became famous and even today the one detailing price action is basically the only trading book worth (buying and) reading besides Trading in the Zone by Mark Douglas.




What you say is not completely right and also hides a complexity.

A price action trader would spot a price rise caused by fundamental traders quite early and would jump on their bandwagon. It's more or less what I have done several times by looking at CFC "managed" markets in EvE.

On the contrary, what you suggest is best done by the likes of Mynna, ATM, Akita T and similar: people with immense wealth and time to study the markets (and twitter tweets and blogs etc) in their deepest nooks and crannies and thus be able to spot those opportunities you mention. Those who can't affect anything nor have the deep game knowledge required for this kind of (fundamental) analysis are going to have too partial information to really make a killing, to really be(come) relevant.
So they start looking for info on the forums, ask for advice from "friends who know" and so on. End result: they enter late, they buy high, they jump too late on the bandwagon and end up burned.

I like it to stave off boredom, theres just so much to be done with just simple arbritage, riding on the tail of the obvious price swings, and simple station trading, that I don't find it super useful for someone who liek VV says, have neither the capital, or fundamental knowledge of who uses what to be able to use effectively

that and he seemed to be talking about the entire market, theres 10,000 of them there, or something like 40 if you just count regions. More than enough pie for everyone.