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Experiment #01: RL finance analysis applied to EvE

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Vaerah Vahrokha
Vahrokh Consulting
#1 - 2011-12-23 21:25:32 UTC  |  Edited by: Vaerah Vahrokha
Introduction

Since I don't see an huge MD activity in these last days, I decided to continue an old thread of mine called Experiment #01: RL finance analysis applied to EvE.

I know many don't approve nor like this kind of material.

I warmly invite them to just... skip this thread and keep it clean like the original one was.
Please let me and those other 2 guys enjoy it.


TLDR
If you skipped here, this is probably not the kind of thread you want to read and your best choice is to switch to another thread ASAP.


What's this about?

For those who were not here back at the time, this is another way to look at EvE markets.
It assumes that EvE markets are demand and supply driven enough to be compatible with RL markets and therefore they may be analyzed as such.

I use some methodologies I borrowed from my RL currency / futures trading plus some technologies I expressly developed for EvE Online.


Features

- A potentially more than year long price history. This is only available for a select number of items that back at the time I traded. The others may only go back to one year, that's EvE's public market history.

- Use of OHLC candle bars. These are one of the two most commonly adopted graphical representations for markets. EvE graphs are sorely lacking in that respect.

- Use of a fully featured, free platform. I tried several but in the end I picked Multicharts Discretionary Trader. It has all the needed features but no cost, no streaming fee nothing. Plus it may easily import CSV files.

- Simple. No overcomplicated or voodoo-ish "indicators" or squiggly lines but a clean view of the only thing that matters: price. Beware, simple does not mean easy!

- Lazy approach (my favourite life style!). No need to burn your eyes 24/7 undercutting the next e-slave with 200 concurrent orders and super-trained + standings trading alt. You log in with any basic character, slam an order in, go out and some days later you cash in.

- Teaches how to read a market. This is the one option most RL traders with no trading floor access have got.

- No need to be THE expert in a certain market. Some players like Akita T and Corestwo (and others) have a years long, fundamentals market understanding well beyond what you could imagine in your most wild dreams. With this other way you don't need a lot of knowledge about each market, "just" about how to read them. The quotes around "just" mean, you'll still have to practice and learn plenty, just less than them.


Disadvantages

There are disadvantages at using this method, other players won't fail mentioning them anyway.

- It's experimental. The available market history is too limited and my candle-bars generation algorythm has its own limitations to yield fourth digit accuracy like it's otherwise easily achieved with RL markets and RL history precision.

- You have to learn something new. And have an open mind. This is the heaviest limitation. Path followers (the majority) don't apply here.

- Technical financial analysis is ALWAYS inferior to fundamental analysis. Both may lead to the so defined "informed trader" (Reference: Trading & Exchanges by chief Economist Larry Harris) but as described in the same reference, the one with access to reliable fundamentals data will have an higher success rate. Here's the catch, access to reliable fundamentals data is not a given, at all. Only the biggest players (both in RL and in game) have the clear vision of what's really going on. All the others have to settle in for more approximate methods.

- Requires study of material which is not strictly pertinent to EvE. It's true you'll learn how to read ANY market both in EvE and RL but you have to learn what a candle bar is, how to read a graph and so on. This is far from impossible, in fact I myself have started with ZERO finance knowledge, then started playing EvE and learned about this forum. Only then I learned the rest. I took an huge bet: "will learning EvE and its markets help in RL?" I have been lucky, because after I lost my job 1 year ago, that bet is what gives me a chance to earn a living by doing in RL what I like the most: trading the RL markets like it was a game!

- EvE markets are very, very illiquid. A market works best when its liquidity is O(big player liquidity). This is not true in EvE, where many long time players have the cash needed to move entire markets. Therefore - as happened in the past - one of such players may read this thread and decide to skew the market to the opposite direction the market itself is hinting at. Therefore it's best to use these tecniques on the most liquid markets and without telling to anyone in advance. Do otherwise at your own peril!


What about the original thread?

I started the original thread and shown ways to "trade different" even by just using the provided EvE market graphs and facilities. These ways do work and are worth a look (basically it's about buying the dips and selling the peaks). Though in this thread I'll focus in what I started in the second half of the original thread: trading with nothing but price, because it's what I am using since 9 months now.


The thread continues at this location.
Vaerah Vahrokha
Vahrokh Consulting
#2 - 2011-12-23 21:41:28 UTC  |  Edited by: CCP Phantom
A reply was posted in a thread in the current top MD page. Anyone with similar concerns please post there.
Vaerah Vahrokha
Vahrokh Consulting
#3 - 2011-12-23 22:19:35 UTC  |  Edited by: Vaerah Vahrokha
Some useful links first

All of this comes from the original thread.

Key to the abbreviations used.


The Slow Sell System for Lazy Marketeers
The thread that started it all, by Rudy Gnarl. It did not grow to 100 pages nor had bombastic posters yet it's a foundation for the position trader in EvE.


How to read the in game EvE market charts
Thread explaining EvE markets graphs, it is a great reading before going ahead with the rest of this thread.


Babypips
Comprehensive, ground zero and quite fun starting course, it explains a lot of concepts with comics etc.


Investopedia: Support & Resistance Basics
This link explains concepts about support, resistance, round numbers, Fibonacci numbers and how, why they are used and work.


Price action basics
101 of the so called "price action".


Beyond the Candles (English)
PRICE (Italian)
The actual RL method, by its original author.


James 16, THE definitive price action trading reference
This hulking and totally free didactical material is possibly the best you will ever be able to find anywhere.
Thousands of pages with examples, videos, tutorials, everything you could ever dream of learning about trading. And beyond.


Short candle bars price action reference
The documentation above often talks about mysterious things like "BEOB", "pin bar" etc. This PDF is a short list of possible price action setups.
Vaerah Vahrokha
Vahrokh Consulting
#4 - 2011-12-23 22:45:29 UTC  |  Edited by: Vaerah Vahrokha
Mexallon

This is one of the hot markets of these days and happens to be one of those I have more than one year worth of data about.
Beware, this is a market that is very susceptible at being manipulated, therefore - as mentioned above - some elder players WILL play it against you if you enter it now.
I am posting it for pure didactical reasons, I have already made my profit on it and other minerals I bought before I practically quit EvE in June (even if I kept posting and sometimes logging in for longer).


First of all, we have to look at a market and understand it.
Most elder players do this automatically, they just know that Mex is rising and why.
Most other markets are way less known, this method helps learn about them regardless of the fundamentals (knowing them is still a nice plus, though!).

Therefore first we want a broad view of the market, and learn What Price is Doing (WPD). In RL markets they switch to monthly candle bar view and look at the last years.
In EvE we have to settle with what's given us, about 1 year and half. It's still enough to see the price behavior.

Monthly graph linkage.

What does that graph show?

A bunch of "candle bars" roughly describing a serpentine path upwards. The X axis lists the dates, the Y is the price.
Each candle contains a bunch of information.

They have a rectangular "body" and two thin lines protruding out of it. As shown in one of the links above, candles represent price at the time of the market open, close (for a given session, in this case a month) and the highest / lowest price reached during that period. The candle is green if the price at the close is higher than at the open (bullish candle), red if the close is lower than the open (bearish candle). The upper "wick" or shadow represents the strength of sellers during that session, the lower "wick" or tail represents the strength of the buyers. Most candles have both shadow and tail, buyers and sellers are in a never ending fight to pull price where they want it to go. Look at it like it's a "pull the rope" game.

The serpentine motion is the consequence of this game. Most often the buyers or sellers prevail with a sudden (temporary) victory but later on they invert their roles (i.e. buyers will want to sell and take profit). Price always goes in zig zags like that and quite often those zig zags hang at certain levels that repeat again and again. These levels are the equilibrium point between the opposing traders and demand vs offer. Price will tend to "snap" to those levels and after a while it's possible to draw a line connecting them, called "price level".

In the graph above look at the purple line sitting at price = 30 ISK PU. Several candles touch it both from above and below, that's called "a strong price level". Some times, price levels coincide with round numbers (30) aka RN. Price levels are established by demand and supply but traded by human traders, they tend to round up / down their price. Price levels are usually drawn at top and bottoms of price swings. Those lines touched both from above and below are the most important.


Why are we looking at a monthly graph?

- It gives a quick glance to the market on long term.

- Monthly candles contain a LOT of information. Markets have many properties, one of them is being fractal and self-similar at different time frames.

- A monthly candle bar is made of weekly candles, weekly candles are made of daily candles. Depending on market, a monthly candle may contain up to 30 daily candles, that is it contains 30 times more information and it's 30 times more accurate. The opposite is true as well. A 5 minutes candle contains very little information and is easily influenced by brownian noise, market "news" (i.e. PMI reports), manipulations and so on. This is what makes trading at short term potentially very fickle and dangerous. The same noise is vastly less impacting on a daily candle (the minimum we and EvE use), 288 less times less impacting. On a weekly candle it's even less impacting and so on.


Let's get back to the graph now.
What we see is that who bought Mex (and other minerals) in June - July like me, bought it at the lowest yearly price. This is a very known information to the biggest EvE mineral traders, look for excellent buy opportunities in summer and then sell in winter at and past Christmas days.
Since summer, price rose in a gradual way, then "something happened" (I was not playing, I suppose patch notes introduced those new ships that use lots of Mex) and big players started hoarding Mex.
Some of them cashed in hard, in November. See that huge, huge shadow (candle "wick")? It represents a massively huge sellers strength. Others chose not to, in fact the Nov candle body is still green (buyers > sellers) and the close is not managing to get price back inside the price level (purple line) sitting at 34.8.
The players who entered first and thus earned the most are the Block Ukxs and big alliances. Possibly Akitas kind of smaller players too but they have less impact on price.

In Dec, more players followed the trend and rushed in to buy Mex. The late comers ALWAYS risk much more and earn less than the path makers. Exactly like in RL, where big institutions push retailers to buy high and possibly get burned when they see the big bank dumping all their stock on their face.

Notice how candles are NEVER final until they close. I.e. the Dec. candle gives information but it's not closed yet (of course) therefore it won't give final buy / sell decision worthy information. Huge losses await those who won't follow this paragraph.
Vaerah Vahrokha
Vahrokh Consulting
#5 - 2011-12-23 23:27:58 UTC  |  Edited by: Vaerah Vahrokha
Another detail we can learn from candles is the "sentiment". Noticed how the Dec candle is HUGE yet it does not go above the November one? This is known as "candle valid" concept. I.e. the sentiment of a candle encompassing another is valid until the other candles closes beyond it.

Therefore, Dec candle not only is not closed yet, but also does not say if price will keep rising or not, until it passes the Nov. one.

It's very possible that it will, demand (new ships) is definitely here and this is the high prices time of the year but the market is telling us: "be prudent, I will tell you if and when to proceed".

How does a market tell what it wants to do? By retracing on itself (the zig zag motion). Here's a more in length description of the process.

Markets may (and may not) give out hints at how much they are "loaded" and ready to unfold like a coil. This is NOT a common event and sadly, unlike fundamental traders (with excellent data backing them up) we cannot trade unless a market graciously gives out blatant buy or sell hints. With practice, we'll learn that markets are not that stingy at giving out hints, it's just our level of practice denying us to see them. When I re-read the original trading thread where I learned this method, I see myself commenting how there was but 1 trading opportunity a month tops... and now I see so many everywhere. Practice, practice, practice!

Anyway, what we wanted to see about WPD (what price is doing) is done: we have seen how the market is going up, even too much and how the last candle is still not passing the Nov one, which suggests great prudence and / or short term trades if any.

Remember, the top priority is called "capital preservation". You may bite your nails because of a missed trade opportunity, but you won't have any nails left, if you rushed in and melted all your capital in a lemon trade.

The next step is to look closer at the market, and switch to a weekly candle bar graph.
Vaerah Vahrokha
Vahrokh Consulting
#6 - 2011-12-24 00:04:55 UTC
Weekly chart

Here's is the link to the weekly candle bar chart.

This chart lets us see the so called "market structure" in a closer view.

We may see how price formed a W (weekly) PB (pin bar) in July - the red candle with long tail = many strong buyers.
Since then, P (price) started a nice zig zag upwards. See how the purple lines seem to affect the candles nearby?

Monthly purple lines are the strongest, in a weekly graph they are stronger than the candles, which are weekly.
A candle able to drill thru a monthly line is very powerful, it had to exert a big effort, usually price will skyrocket once this happens.
Many times, candles can't drill thru powerful lines. So they bounce and invert the price direction (retracement).

Another element we may see is the sort of "channel" that price forms when it sits between those two diagonal red lines, called "trend lines". Diagonal lines are rarer than horizontal but act in a similar way. Diagonal lines are said to form dynamic support and resistance, horizontal ones static (*).
A further information about that channel, is that price stays within it, forming a range. In this phase the market is said to be "ranging" or price being in "range market". Once again, if price is compressed between two horizontal lines, it's called static range market, if it's compressed between diagonal lines it's called dynamic range market.

Range markets are very important, price goes ranging once it reached the equilibrium between supply and demand. Range markets may last months or even years in RL markets, until something happens and price "trends" in a zig zag slope to the next equilibrium.

What's relevant about this range market vs what Mexallon is doing?

Well, two informations may be gathered. One is that at beginning of December, price suddenly broke that "diagonal channel". This is an often sign that it's time to pay attention to this market for trading opportunities. Someone who missed the buy opportinities at July and 2nd Sept week (another pin bar) could still have made a profit by seeking buying signals once price broke the 36.5 mark / diagonal range.

The second information is that like horizontal lines, diagonal ones too may flip from being a resistance to become a support. That is, there's a chance for price to come back down, touch the extension of this channel from the upside and sit on it / bounce back up. I won't explain the whole "support becomes resistance" concepts since they were extensively explained in the original thread. For those willing to read a nicely illustrated explanation from another source, see this Investopedia link.

Back to the graph, what else do we gather out of it? Weekly charts are usually used like monthly ones: to get what price is doing (WPD). Sometimes they may be directly used to initiate a trade as well (see daily graph) but that requires huge, huge pockets.

What do those last four candles tell us? The first (the big one) shows a massively huge buy operation and subsequent heavy sale (the huge shadow over the candle), all in the same week. Someone got very, very rich.
Next candle is called a "battle candle". They usually come in the shape of spinning top and doji (see the reference links, they show the various shapes and names). In this case we have a spinning top, it shows a big battle between buyers and sellers, they have almost the same strength. The next week, the buyers prevail and rise the price (one but last candle).
That candle has a dangerous warning though: the sellers are still there (shadow longer than tail).

The next candle is even more dangerous. In fact you may see it has a gap below it. It means there's a lack of buyers and sellers inside that "hole", markets almost always go fill those holes later, in a never ending process called "price discovery".

Gaps may indicate a severe lack of liquidity, like few traders were artificially pushing up the price. Another danger sign is the fact that this lonely candle fails to close above the beginning of Dec candle. This means that sellers are out there, waiting for an opportunity like hawks.

Why am I saying all of this? To teach you the mentality of someone who wants to preserve his capital.
You really want to list all the reasons NOT to trade before you decide to trade.

Trading is a personal responsibility decision, you don't want to hype and basically deceive yourself into ruin. Capital preservation > all.


(*) All those terminology come from the above linked "original method thread"'s Author.
Vaerah Vahrokha
Vahrokh Consulting
#7 - 2011-12-24 00:48:57 UTC  |  Edited by: Vaerah Vahrokha
Daily graph

We finally get to the second phase. We studied What Price is Doing (WPD) and now we may switch to analyzing Where Price is Going (WPG).


Here's the link to the daily candle bar graph. We'll see possible outcomes later.

Now price is shown in full detail.

We may see how the huge buy and sell operation mostly happened in one day, with some residual sale on the next day.
The next days someone else (possibly the same player, probably a smaller one) repeated the operation again, in smaller scale.

Price rose describing a trend (red diagonal line) until the last candles, where you may see the gap. Needless to say, the gap sits at round numbers (hint at being "player made demand and supply game" more than true market demand and supply). The cyan lines the candles are sitting on top of are weekly price levels. They are weaker than purple price levels but still strong enough, they actually give the trading "signals" in case the candles close to them form known buy or sell patterns.

Buying or selling away from monthly / weekly price levels is a risk, price patterns lose much power when they don't happen there and are only useful as hints about where to partially close a trade (trades can be closed in multiple steps).

As you may see, no candle goes above that huge sell out candle, I have drawn a dotted white line to show that level against the next candles.

The only discernible price level for the last week is a weak orange colored daily line. It's too weak to be used as reliable trade signal (weekly / monthly are a must).

With another methodology called "Daily methodology" you could have bought short term 2 days ago on that red PB (pin bar) and sold at the next "price stop", which in this case is exactly that white dotted line. This works well in RL markets but in EvE it'd give a very small profit for such a low price mineral, only 2 ISK PU. If you put 1B on it, you'd have made about 38M in one day.

Let's see about the possible future scenarios.

This is the moment where the finger pointing and flaming begins. "You can't know the future", "price is random", "brownian motion" and similar.

Guess what, that's true. What this method is about is to gather as many clues as possible and then prepare a set of scenarios with possible outcomes.


"If it's December and there's fever, then the patient should simply have a flu". Not a profound scientific approach but it's used every day.

"If price retraced on a weekly support and shows a bullish price action pattern, then price should go up in the next days till the next price level". Same. You take an educated bet before starting the trade: if you lose, you lose maximum 1 percent of your capital, you will ONLY accept trades that potentially yield you 4 percent or more of capital growth. This is one way of slowly but surely build up capital over time.

In this case, I'll show two of the possible price scenarios and what I'd do, if I still had Mex left (I don't, and as I said above, big players reading this article WILL manipulate the market to make you lose, this is why I usually don't post trading entries, people told me in game that they screwed other traders on purpose like that).


Scenario 1

Price hits the dotted white line above, retraces down to the weekly (not the daily! it's not safe!) price level at 49 ISK and then shows a bullish price action pattern (PB, BUOB, DBLHC...).

Linkage.

At this point you may buy but be ready to dump at least 70 percent of the stock once you hit the white line again. If you are expert, since we don't have past history at levels above this, you may use a Fibonacci Extensions tool to guesstimate the next take profit price level.


Scenario 2

This is a better scenario, price will probably run up a lot more. Price will hit and drill thru the white dotted line and close well above it.

Linkage.

Then in the next days it will drop back and hit the same white line from above and bounce on it.
If it forms a bullish pattern (important!) you may buy with a possible first take profit at the level the first drilling candle went up to (with its close), then let the trade run till it shows a bearish pattern or starts swinging back down.


Other scenarios

Prices moves as it feels like to, it may do whatever it wants, therefore there are many possible other scenarios besides the two above. Many will be sell scenarions (but EvE got no short sell ability).
Whatever scenario you plan, BEWARE TO ONLY START A TRADE WHEN YOU FULLY UNDERSTAND WPD and WPG. Else just stay out. Other, clearer trading opportunities are everywhere.


Notice again, some big player might (ab)use of this article to skin you alive, therefore use it to learn the concepts and apply them to another liquid market without telling anyone until after you have closed your trade.


Edit: I got crazy with this BB Code parser Sad, had to replace all percent signs else the page bombs out as shown in this thread.
Soil Andgrean
Doomheim
#8 - 2011-12-24 02:00:27 UTC
thank you! i missed your posts Blink

would it be possible to give me a hint how to import the eve csvs into the multicharts tool and how to set up the fields correctly?
Jeyson Vicious
The Scope
Gallente Federation
#9 - 2011-12-24 04:44:54 UTC
This looks like it might be genius. But I would need +3 willpower/intelligence implants and a booster of the right sort to really sit down and absorb it.
Gatan Hahran
Brukterer
#10 - 2011-12-24 14:17:59 UTC
very interesting.
*coughs and goes a few steps back until he disappeared into a more shady part of the room*
Ghoest
#11 - 2011-12-24 15:36:11 UTC
Or

1 You could just get to know all the in and out of the economy(its not all that big really.).

2 Pay attention potential to large pushes and changes(dev changes, alliance actions and public perception.)

3 Make educated guesses on what changes will happens and wager your money on how you know this will effect the economy.




Eve doesnt have all that many distinct notable items overall and it has a rather small number of powerful entities(the devs, maybe 10 alliances, and maybe 50 super rich guys who actively trade.)

Normal financial metrics are not very useful when such a small number of players consistantly have such huge effects.
The only items in the game that could potentially be work like a normal market are the minerals and T3 resources but even they are extremely subject to the actions of the key players.



I

Wherever You Went - Here You Are

Vaerah Vahrokha
Vahrokh Consulting
#12 - 2011-12-24 20:27:33 UTC
Ghoest wrote:
Or

1 You could just get to know all the in and out of the economy(its not all that big really.).

2 Pay attention potential to large pushes and changes(dev changes, alliance actions and public perception.)

3 Make educated guesses on what changes will happens and wager your money on how you know this will effect the economy.




Eve doesnt have all that many distinct notable items overall and it has a rather small number of powerful entities(the devs, maybe 10 alliances, and maybe 50 super rich guys who actively trade.)

Normal financial metrics are not very useful when such a small number of players consistantly have such huge effects.
The only items in the game that could potentially be work like a normal market are the minerals and T3 resources but even they are extremely subject to the actions of the key players.



Not all the players have the time or the skill to really follow the fundamentals of the markets.
To an assiduous player it might seem natural to follow the gossip, the "alliance XYZ is going to take ABC moons".
To the long time player it might seem (and is) natural to buy 100B worth of materials in July and resell them in December / January.
To the MD veteran it comes as second nature to separate chit chat and rumors from actual insightful and relevant supply-demand threads.
The majority are not like that, expecially after EvE lost a number of elder players thanks to Incarna.

This is a method that lets people get a decent (not the top notch, but not everyone are an Akita or a Corestwo) picture of any market with a small time investment.
Even just learning how to read a market is a valuable asset and can fruitfully compound knowledge of the fundamentals.




As for the Multicharts data import tutorial, it's coming up nicely but I need some more time to finish it. It's getting impressively illustrated step by step!
roigon
TURN LEFT
HYDRA RELOADED
#13 - 2011-12-24 22:52:45 UTC
This is all very interesting and all, but I fail to see the improvement of these candle diagrams above the normal graph, the only difference seems to be the resolution, in which month/week/day get solidified in a single "candle" instead of a graph line.

Now I see how this graph supports your way of market trend prediction. But what I fail to see is the logic behind that prediction. For instance, in your example you show that the sell order max price for december was 54,- ISK, and this somehow becomes a important ceiling for november? I don't see the logic in that. It feels arbitrary.

But I'll freely admit that I also did not 100% understand what you are saying. So if you can enlighten me then that would be swell.
Vaerah Vahrokha
Vahrokh Consulting
#14 - 2011-12-25 01:13:29 UTC  |  Edited by: Vaerah Vahrokha
roigon wrote:
This is all very interesting and all, but I fail to see the improvement of these candle diagrams above the normal graph, the only difference seems to be the resolution, in which month/week/day get solidified in a single "candle" instead of a graph line.

Now I see how this graph supports your way of market trend prediction. But what I fail to see is the logic behind that prediction. For instance, in your example you show that the sell order max price for december was 54,- ISK, and this somehow becomes a important ceiling for november? I don't see the logic in that. It feels arbitrary.

But I'll freely admit that I also did not 100% understand what you are saying. So if you can enlighten me then that would be swell.


This is a very nice series of questions!

First of all, I think I need to explain better what this thread is about so the replies will feel better in place.

Many probably have not read the old one, it all started with me being grateful with MD because the 2-3 years ago discussions really pushed to me into learning the basics of economy. In 2009 I really did not know ANYTHING about all those bonds, IPOs, BSAC Exchange and it's graphs etc. Thanks to many posters I learned the foundations and later became an auditor both for MD and in game corporations.
When I lost my job and seen no perspective I thought: "why not live the game?" I learned things here, maybe they work IRL too. And pronto, I started applying EvE things in RL and vice versa (search for NEISIN for another experiment). Now I am trading IRL - still thanks to that first "impulse" I got from MD and want to backport some of it in EvE. I want to share the easiest concepts I learned IRL as a sort of "give back" to MD, maybe one day another person will feel as good as I did when I learned from MD.

Now for the questions: the improvement is here, and it's why RL graphs have candles and not those puny dots we get in EvE. Each candle bar tells a session story and a sequence tells the market sentiment.
I.e. in EvE you can just see price dots going up and down, price candles also tell if price is probably going to stall and why.
In the end it's like you read a pentagram. You get more information and information asimmetry is what makes a trader win over those without. The process is detailed in that book I linked in a previous post, "informed traders" > "uninformed traders" > gamblers.

As for the ceiling, the example I chose is quite hard but Mexallon is fresh news and so I picked it up. Otherwise usually it's much easier, you have past price references at levels close to today's and those may act as a guide. Using a "taller" candle as maximum for the next ones is less reliable indeed, it's why I sold my stuff instead of waiting for it to rise even more.
Sure, fundamentals say that Mex should grow but the nice thing is... you can take (big in my case) profit and in case, reopen another buy trade on a price dip later. You lose just the trade fee but since you buy at a dip you more than compensate for that.

One thing that MUST never be forgotten is that market discounts information as it comes, not when WE believe it comes.

Example: the first Hulkageddons, prices rose with a slower pace and "synchronized" with the actual increased demand of minerals / gank boats / exhumers.
Then the collective of players who form the markets "learned" that Hulkageddon = increased demand etc. and started anticipating the purchases and the price speculations. Result: after some years we get increased prices and stuff dumped on market well before time and thus, those buying minerals and ships at Hulkageddon start would be burned. They come too late. The market discounted the information by rising prices early.

Now, we know that Mex is going to be in demand... fundamental big traders can tell you. But when? With so much patch knowledge, did the markets discount that demand already and thus we are risking buying high before a crash? Or not?

Without candles you can't know. With them, you may plan the trade and - when the proper conditions meet (i.e. retracement + bullish price action) - you may trade the plan.

As for not understanding, what I say, I know it's really hard to see a condensed "how to" in a gaming forum and learn all what's needed. It's also VERY hard for me to write it down in a shortened and simplified version that still manages not to be completely useless. Only by reading the links I listed in the first posts one can REALLY get the whole thing starting from zero.

The original thread - and this one - are more aimed at people who already have RL trading concepts and want to see them correlated with EvE's.

If you feel like having more clarifications please be my guest, I'll reply as good as my lackluster English can.



The Multicharts tutorial is ready but I am going to post it later. Now it's champagne time.

Merry Christmas and happy new year!
Mu-Shi Ai
Ai Capital
#15 - 2011-12-25 02:26:29 UTC  |  Edited by: Mu-Shi Ai
I fail to see how making these charts constitutes a "small time investment." What are the relative terms around which we're basing "small"?

Congratulations, you've got 100bn ISK to dump into minerals. Who else around here can really say that? Maybe a few people. Who, of course, already know what they're doing, with or without these candle charts.

This whole thing just seems like one more way for VV to flex old-school MD ego, going on about how the simpletons, of course, just run on rumors and whatever other low-brow forms of information, but the sophisticates (like VV, naturally!) make candle charts and do it all proper-like.

Very few people around here have enough capital for this to even be remotely worth the time and effort. So naturally, the whole scheme reveals itself as nothing more than a way for VV to declare how much more serious than you that she is about all this trading malarkey.
Vaerah Vahrokha
Vahrokh Consulting
#16 - 2011-12-25 08:10:33 UTC  |  Edited by: Vaerah Vahrokha
Mu-Shi Ai wrote:
I fail to see how making these charts constitutes a "small time investment." What are the relative terms around which we're basing "small"?

Congratulations, you've got 100bn ISK to dump into minerals. Who else around here can really say that? Maybe a few people. Who, of course, already know what they're doing, with or without these candle charts.

This whole thing just seems like one more way for VV to flex old-school MD ego, going on about how the simpletons, of course, just run on rumors and whatever other low-brow forms of information, but the sophisticates (like VV, naturally!) make candle charts and do it all proper-like.

Very few people around here have enough capital for this to even be remotely worth the time and effort. So naturally, the whole scheme reveals itself as nothing more than a way for VV to declare how much more serious than you that she is about all this trading malarkey.


Your post manages to be longer than Roigon's yet it's so much negative and brings so little on the table. I'll start from the bitter end of it: NEVER EVER I state this is better than other's trading methods.

I have written it in the past and it's written in this very OP under bolded letters:


Quote:
Disadvantages
...

- Technical financial analysis is ALWAYS inferior to fundamental analysis.


Therefore all your assumptions are unfounded at best.
Then, I am not trying to school people off an high horse (there are FAR shorter and easier ways to do that) but to give back to the MD community what they gave me. *I* was your mentioned simpleton who could not discern an IPO from a cake and would stare in awe reading BSAC's market statements.
MD collectively teached me and I am grateful of that. Good karma runs around and I am trying to give some knowledge back to the same community who gave me first. That's really it, the rest of your post talks about your negative vision more than my thread.

About the capital. Since it's a daily method (max 1 trade per day per market) it assumes a certain starting capital to make it very worthwhile. Since it's percentage based (risk 1% on loss, earn 4-20% on win), it works with any amount but of course it's not the super duper "instant rich" +200% a day scammy scheme you see sold on internet every day. Therefore yes, some money is required.

I will briefly detail the typical profile of who could use this way and those who should not.


Should NOT use this method (but imho it's still worth material to learn):

- Big market players with in depth knowledge of EvE markets, alliance politics, ability to screen rumors and draw their own unbiased scenarios.

- Small market players who just started the game. Their hands are already busy as is and making 4% of 10M is not so hot anyway.

- High frequency traders (aka 0.01 ISKers) who like to spend hours PvPing other high frequency traders and bots.


Should give this method a shot

- People interested in learning about RL trading, gradually starting from something they know and like (EvE).

- People with 2 - 5B+ who don't really have the time or patience to follow the hundreds events happening in EvE.

- People who like "fire and forget" trading, typically they already practice the "Slow sell" EvE trading method so they are not in a hurry to see the trillions ticking in.

- People who are much focused in PvP and piracy and could use money. They can auto-pilot a random alt (no trading skills needed, any scout / bait / Falcon alt will do) in Jita, place an order, get back to what they like.


Finally, even with the fundamental analysis approach you'll see the same 100B "required" (it's done by the big players) so it's not a relevant objection.
Vaerah Vahrokha
Vahrokh Consulting
#17 - 2011-12-25 09:19:32 UTC
Fully illustrated tutorial about how to use MultiCharts

A Reader kindly asked for some instructions about how to import EvE prices data dumps in the RL trading platform I currently use for my trading examples.

Therefore I created a full length, step by step tutorial full of pictures, downloads and so on.

Since these new forums seem so limited in functionality (I dare say some 1990s forums have more) I posted the whole tutorial on my own gaming website: Vahrokh.com.

I am going to link its contents here so you may easily access it from these forums.


The tutorial has the following chapters:

1) Installing MultiCharts free edition

Includes step by step instructions about how to easily install it, screenshots and my own EvE templates and test data.


2) Creating and importing a new commodity

Includes step by step instructions about creating one new EvE commodity, screenshots with arrows indicating which buttons to press, practical examples.


3) Importing the CSV OHLC data (the EvE markets data dumps)

Includes step by step instructions about how to import the sample (or any compatible) markets data dump in the platform and screenshots with arrows indicating which buttons to press.


4) Creating a new chart

Includes step by step instructions about how to create a new chart (given the commodity created in 3), screenshots with arrows indicating which buttons to press, hints about how to make this step only once and how to make the resulting chart really look like mine.


5) Very basic platform usage instructions

Shows pictures with arrows about the most common buttons to press to achieve the basic functionality needed to operate the platform, like i.e. how to expand / shrink the bars, how to change time frame and so on.

Once you learned how to operate this platform you are ready to operate most professional RL trading platforms as well. It's not hard!


6) Appendix: how to create CSV data dumps

Last but not least, how you may create your own EvE (or any other) markets data dumps and what to put in them.


I hope you'll have as much enjoyment reading this tutorial as I had creating it!
Callean Drevus
Perkone
Caldari State
#18 - 2011-12-25 10:00:10 UTC  |  Edited by: Callean Drevus
Mu-Shi Ai wrote:
Quote:
To the MD veteran it comes as second nature to separate chit chat and rumors from actual insightful and relevant supply-demand threads.
The majority are not like that, expecially after EvE lost a number of elder players thanks to Incarna.


But of course, your ego has nothing to do with any of this. No sir!


Well, you have to agree there is a lot of chit chat and rumours these days. In fact, I think you can just seperate all current MD threads, and leave a good (and clean) picture of reality :P

That said, this is the most sensible thread I've ever seen in MD VV, thank you! Though I must admit that your previous threads always came of as a little bit of wizardry, I think I might actually be able to understand this one Blink. As soon as I find out how to build those candle charts they'll be in EMK. As soon as I am able to read them, I'll try applying the logic.

The appendix on creating CSV data dumps left me with a question though. How do YOU calculate the daily closing price?

Developer/Creator of EVE Marketeer

Vaerah Vahrokha
Vahrokh Consulting
#19 - 2011-12-25 12:23:12 UTC
Callean Drevus wrote:

Well, you have to agree there is a lot of chit chat and rumours these days. In fact, I think you can just seperate all current MD threads, and leave a good (and clean) picture of reality :P


Chit chat always has a reason to exist. Be it the clueless guy who bought overpriced stock and now pretends to convince others to buy buy buy or be it the old time super known big player who wants to create expectation and get a long term revenue.

Both can't be so happy if someone else comes up with market reading that debunks their claims Pirate


Callean Drevus wrote:

That said, this is the most sensible thread I've ever seen in MD VV, thank you! Though I must admit that your previous threads always came of as a little bit of wizardry, I think I might actually be able to understand this one Blink.


Thank you for the appreciation. I very well understand the "wizardry" that such threads seem to involve. If I put all what's behind the scenes I'd have to create a BORING tome hundreds pages long, and who is going to bother with it? We are still in a game after all and I feel I am really pushing with the walls of text as is. I linked several sources for who wants an in depth coverage AND dozens of examples of planned scenarios posted one week and then reviewed after market moved and - unsurprisingly - it moved as fore-planned and fore-posted.


Callean Drevus wrote:

As soon as I find out how to build those candle charts they'll be in EMK. As soon as I am able to read them, I'll try applying the logic.


If you need further help don't exitate to contact me in game or on SCC-Lounge.


Callean Drevus wrote:

The appendix on creating CSV data dumps left me with a question though. How do YOU calculate the daily closing price?


First a premise: exact zero dot zero precision is NOT required.

EvE Market data usually is sanitized but that won't cut the candles shadows / tails enough to make them useless.
Example, a doji / spinning top with very long "wicks" (including market manipulation and straggling prices) will be sanitized into a shorter wicks doji / spinning top. The message is still the same: buyers and sellers are both in, are fiercely fighting and we should really stay out and wait for a winner (and then jump on their band wagon).

Same for candles bodies: if a fat marubozu is not precisely rendered by the ISK, who cares? The real value of candles is the sentiment they express and even then, it's mostly relevant when they touch a support / resistance.

All of this blurb to say, don't worry if whatever data gathering method is not precise by 0.1 percent.

What I do is to run a self made app after downtime (but doing it at midnight GMT is fine too) which gathers min and max for the previous, just ended day and the max (current minimum sell order value, current max buy order value). The latter value is put as previous day close and as current day open. We can do this because EvE markets don't really close therefore the close of one day is adjacent to the open of the next day.
Vaerah Vahrokha
Vahrokh Consulting
#20 - 2011-12-25 20:24:47 UTC  |  Edited by: Vaerah Vahrokha
Loraine Gess wrote:

You are the kind of idiot that gets filtered out of this game in a few months. The only reason you didn't ragequit before was because you've turned this into a single-player game where you hug stations and ignore 90 percent of the content. I look forward to your next 'I'm gone forever here's my drama leaving thread!!" thread.


I am sorry but with all your very unconstructive and rude attacks I have to reply with facts and tons of screenshots and let the other readers judge you.

1) You are the kind of guy who does not check employment history (else you'd notice I was in a pure PvP corp, Dark Rising and we explored FW, low sec and 0.0 for months. We did joint operations with the German big mercs corp who live(d) near Taff. My alts were in Minerva Corp, briefly in Initiative Alliance (0.0 again) and I saw my first Titan when I still used a Rupture.

Sadly, subsequent harsh RL issues (had to work 16+ hours a day) forced me to leave Dark Rising (link to mail screenshot) - best corp EVER - right after I started using battleships because I was so tired I could not play with continuity any more and I was just a drain.

You also did not check the charity video showing clips taken exactly from those places.

You did not check my audits covering POS defenses and 0.0 logistics (i.e. seek for my audit for Brock Nelson) and stuff (implying I had to have experience with that part of the game) nor seem to recall I had my own reserach chain of corps (posted many times plus it's on my website, here's my first POS).

You did not check my low sec logistics service for up to 3B collateral (that was not really much published on the forums, being a known high value target is not so smart after all but I advertised on the "legit logistics" channel). I had some decent couriering experience as these fat rewards screenshots show (link 1, link 2).

I was also logistics officer in Dark Rising (elder members might confirm that) ferrying cargo 7 jumps in low sec. Maybe I had a tiny experience? Feel free to ask to old members of theirs.

More links for you and your "The only reason you didn't ragequit before was because you've turned this into a single-player game where you hug stations and ignore 90 percent of the content".

Here's how I ignored content:

1) About to move in WH few days after WHs patch, Minerva Corp spent some time in there.

2) Docking games in Amamake vs carrier.

3) In corp fleet, moving to Taff (deep low sec)

4) Patrolling and killing at the gate at very low deep low sec Esesier Dark Rising base.

5) Moving house to Syndicate (0.0).

6) In the middle of moving my ships to yet another 0.0 region, Stain.

7) I am HI SEC carebear! Oh wait, this is a L4 mission 6-7 jumps in low sec. I "turned this into a single-player game"! Oh wait I am with two other friends. Linkage.

8) Small roam in 0.0 in hostile territory. So much for the hi sec carebear, eh?

9) 32 men small ships fleet roaming hostile 0.0. But hey, I turned this into a single player game, no?

So, who is the idiot again?
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