Market Discussions

My thinking is possibly correct, but it's usually pretty crazy at best. Say you spot an item with a decent profit margin from production cost and has a decent enough volume. You start to build that item at a good cost, maybe materials from buy orders or self procured, and you make a healthy amount, say like one or two typical days volume. Then, you start posting sell orders, undercutting the competition by say a couple percent each, hopefully you have enough volume to keep this up for a few days or so (need enough competition to start out) and then you get to what was your at cost price, maybe below. As that price dropped, you snag up some of the competitions items as well once below what you feel is a good price to buy. Then you start buying out those that followed you down to that basement level you wanted. Wait a little while for the price to go back up again, start selling all the stock you were able to get at that really low price. Is that a viable tactic?

This is probably what was said as an answer to another question I posted a while back. Just trying to make sure I'm on the right track.

May work, may not work. Sometimes the market then stabilizes on that low level for a couple of weeks, months. I only buy, if I'm running out of stock and the price is so, that I still can expect a decent profit. I do not want to end up with a big locked stock, when the price bottoms out.

What your saying could absolutely work, the problem is you need a big enough volume otherwise another trader is just going to come along and buy out your whole stock and then flip it for his own profit. The other problem is making sure people will follow you down. Some people might just sit on their items.

Just be careful what product you pick to do this and how much volume you stock up. As Tipa said, it can happen that you have to sit on massive volume for months until the price bounce back to good level again for you to make profit.

The principle of the tactic you described is definitely sound and many traders do this, but there are variables that could really mess with your plan.

For example, you could be doing this 'bring the price down and buy up the low priced goods' thing, and someone could dump massive stock on you (because a. he made/got the cheaper or b. he just wants to liquidate), and suddenly you end up with the amount that will take very long time to sell, even if it's a reasonably high trade volume item.

The tactic itself is okay, but my tip would be that when you are placing buy orders for these items (which you would be if you are manipulating the price - you need to manipulate both sell & buy orders), do not set the volume too high. When you are trading in places like Jita with high volumes moving every day and you got deep pocket, it's very tempting to drop tens of billions into things because you see potential for manipulation/profit. But it could take very long time to recoup that investment.

What sabriz sais, occasionally you will find items that you can buy under the production cost. All you need after that is just patience.