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Penny Trading Sucks
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moranno
Murder. Inc.
#21 - 2017-03-16 14:15:25 UTC
Scialt wrote:
Veyreuth wrote:
Like any activity in EVE, the more time you put in, the more you get out. For items with big margins, you better believe your competition is putting in the time before the margins disappear. If you really want to milk it, pop in a movie and keep pace. Otherwise, sometimes a few deep undercuts in response to a shave can get your competition to back off (they would rather not see the margins vanish). Your mistake may have been to enter a market that everyone else sees... more competition. If you do more research, you may find items with smaller margins but less competition. Don't be afraid to fail... as long as you know why you failed, you can get a deeper understanding of the market and make shrewder trades in the future.


The idea that deep cuts drive away people is a flawed view. A station trader is trying to cycle the inventory they bought at the station as quickly as possible for a profit. If your cut is deep they will follow your price unless you cut it so far their profit disappears. (which is going to be barely above the buy order price anyway).

The only time a deep cut in price keeps people from .01 isking you is if you have a low amount of volume. If you only have a few units and you drop the price to a 10% margin (and the original margin was 20%).... I might let your order clear rather than .01 isking you. But if you do that with a large number of units... I'm still going to. I want to cycle my inventory and I'm more than willing to take half the profit in order to actually achieve the profit.

You CAN drive people away from a market entirely if you make it unprofitable. But during that period it will be unprofitable for you as well. You are deluding yourself if you think dropping a million isk per unit item by 10,000 will "scare" anyone.



^^^This. In STONE
Cista2
EVE Museum
#22 - 2017-03-16 15:19:20 UTC
Scialt wrote:
The idea that deep cuts drive away people is a flawed view.

The idea that we are trying to drive you away is flawed and self-centred. Try looking at the larger picture.

My channel: "Signatures" -
Scialt
Corporate Navy Police Force
Sleep Reapers
#23 - 2017-03-16 16:43:32 UTC
Cista2 wrote:
Scialt wrote:
The idea that deep cuts drive away people is a flawed view.

The idea that we are trying to drive you away is flawed and self-centred. Try looking at the larger picture.


This is the direct quote I was responding to: "Otherwise, sometimes a few deep undercuts in response to a shave can get your competition to back off."

That is simply a flawed view of the market.

If you're trying to crash the prices down for other reasons... that's fine. But it's stupid to think that cutting your price by larger amounts in any way discourages anyone from .01 isking you. About the best thing you can do is the trick where people drop the price by more that .01 isk but make it look like .01.

Price is 100,888.88 isk. New price set to 100,868.87 isk. Some people will drop their price to 100,888.86... not seeing the 10 isk change.

That buys you an extra 5 minutes at the top of the pile sometimes.
moranno
Murder. Inc.
#24 - 2017-03-16 16:56:22 UTC
Cista2 wrote:
Scialt wrote:
The idea that deep cuts drive away people is a flawed view.

The idea that we are trying to drive you away is flawed and self-centred. Try looking at the larger picture.



He didnt said that
moranno
Murder. Inc.
#25 - 2017-03-16 17:00:01 UTC
Scialt wrote:
Cista2 wrote:
Scialt wrote:
The idea that deep cuts drive away people is a flawed view.

The idea that we are trying to drive you away is flawed and self-centred. Try looking at the larger picture.


This is the direct quote I was responding to: "Otherwise, sometimes a few deep undercuts in response to a shave can get your competition to back off."

That is simply a flawed view of the market.

If you're trying to crash the prices down for other reasons... that's fine. But it's stupid to think that cutting your price by larger amounts in any way discourages anyone from .01 isking you. About the best thing you can do is the trick where people drop the price by more that .01 isk but make it look like .01.

Price is 100,888.88 isk. New price set to 100,868.87 isk. Some people will drop their price to 100,888.86... not seeing the 10 isk change.

That buys you an extra 5 minutes at the top of the pile sometimes.


I sometimes drop it to 52433.78. It`s all a game
William Ormono
Reason Will Prevail
#26 - 2017-03-17 16:08:11 UTC  |  Edited by: William Ormono
Scialt wrote:
Also... the "penny trading sucks" mantra is stupid.


It’s not so much a mantra as it is the title I chose for the post Roll

Scialt wrote:
What you really don't like is people beating your order price. Here's the thing... they hate it just as much when you do it to them as when they do it to you.

Would you really be happier if they beat your order by .1 isk each time instead of .01? Or by 1 isk? or by 10 isk?


Obviously no.

I would have titled the post “Trading strategies that involve price modifications of insignificant value in order to ensure successful sales in a reasonable amount of time suck”, but I’m a fan of brevity and I figure 99% of readers will understand what I’m talking about (and I don’t want to hear the advice of the 1% that can’t “read between the lines”).

Scialt wrote:
You wouldn't. You just hate that you put an order up and 10 minutes later it's 4th on the list. And they hated it when you did the same to you.

The AMOUNT they're beating your order by is simply them trying to get to the top of the list without drastically dropping/raising the price. If that's your goal... you're stupid to do anything other than .01 isk.


Yup, that’s how penny trading works.

Scialt wrote:
This feels a lot like people complaining they hate it when they try to mine in low-sec and a player pirate warps in.

You have the same sort of options:

1. Fight back (in trading that means you .01 isk them right back)

2. Bait them and try to cause them harm try some market manipulation)

3. Run away and come back when they aren't there (in trading that means figuring out their activity and making sure you beat their orders after they're logged off so you get a long period of being at the top of the list)

4. Relocate and mine elsewhere (in trading that means moving to a different market or a different product).


Comparing penny trading to low sec mining/PvP is kind of a stretch, but I think I see your point. Good suggestions for combating penny trading, definite food for thought here. Thanks for input.

Scialt wrote:
Whining about it isn't really a productive option.


Would you consider posting on a forum to solicit advice from other traders who may have encountered and overcome this obstacle to be a more productive option? Maybe I’ll try doing that instead. Wait a minute….Blink
Scialt
Corporate Navy Police Force
Sleep Reapers
#27 - 2017-03-17 16:34:47 UTC
William Ormono wrote:
snip



Look... this is simply how the market works in eve. Lowest sell order/highest buy order gets precedence.

I constantly read threads on here talking about how "bots" are beating their orders by .01 isk.

It's simply not what's happening... the reason you constantly get your orders beaten by .01 isk is that's the best strategy to maximize your margins when relisting an order. Everyone is trying to do that. So when you have a number of people all resetting their orders to .01 is better than the best order.... you're constantly getting beaten. That happens to the guy .01 isking you as well.

The issue is it's BETTER to have that happen by .01 isk then 1000 isk. The smaller the increment they outbid you by, the more both of you make when people buy your sell orders or sell to your buy orders.

You're basically asking how to combat someone putting up orders at a better price. The increment is immaterial. And the options are pretty obvious.

1. Relist your orders at a better price.
2. Trade at a different time when they aren't online to beat your order price.
3. Crash the market to drive them off.
4. Leave the market.
5. Ignore it and hope a big transaction comes along that fills both their orders and yours.

If there was some magic method to keep your order at the top longer... everyone would do it and that method would no longer work.
William Ormono
Reason Will Prevail
#28 - 2017-03-17 18:33:48 UTC
Scialt wrote:
William Ormono wrote:
snip



Look... this is simply how the market works in eve. Lowest sell order/highest buy order gets precedence.

I constantly read threads on here talking about how "bots" are beating their orders by .01 isk.

It's simply not what's happening... the reason you constantly get your orders beaten by .01 isk is that's the best strategy to maximize your margins when relisting an order. Everyone is trying to do that. So when you have a number of people all resetting their orders to .01 is better than the best order.... you're constantly getting beaten. That happens to the guy .01 isking you as well.

The issue is it's BETTER to have that happen by .01 isk then 1000 isk. The smaller the increment they outbid you by, the more both of you make when people buy your sell orders or sell to your buy orders.

You're basically asking how to combat someone putting up orders at a better price. The increment is immaterial. And the options are pretty obvious.

1. Relist your orders at a better price.
2. Trade at a different time when they aren't online to beat your order price.
3. Crash the market to drive them off.
4. Leave the market.
5. Ignore it and hope a big transaction comes along that fills both their orders and yours.

If there was some magic method to keep your order at the top longer... everyone would do it and that method would no longer work.


You seem passionate about this topic (and a little irritated, if you don't mind me saying). It sounds like you've read through several similar posts (i.e. discussing how to overcome penny trading) and are tired of people talking about it.

I'm new to trading, so I apologize if I'm re-opening an old and stale can of worms.

The discussion this post has created has been useful for me though. Tips like trying to learn the purchase habits of high volume buyers are helpful. And honestly, even just hearing the success of others is encouraging.
Scialt
Corporate Navy Police Force
Sleep Reapers
#29 - 2017-03-20 17:10:35 UTC
William Ormono wrote:
[quote=Scialt]

You seem passionate about this topic (and a little irritated, if you don't mind me saying). It sounds like you've read through several similar posts (i.e. discussing how to overcome penny trading) and are tired of people talking about it.

I'm new to trading, so I apologize if I'm re-opening an old and stale can of worms.

The discussion this post has created has been useful for me though. Tips like trying to learn the purchase habits of high volume buyers are helpful. And honestly, even just hearing the success of others is encouraging.


Irritated is probably the most accurate adjective.

I've seen too many people (both in game channels and on here) who believe anyone who beats their order by .01 isk is a cheating bot user.

The problem is that it's really the proper trading maneuver to sell/buy as quickly as possible while minimizing profit. It's probably more reasonable to get annoyed at those beating your order by 3.33 isk as opposed to those beating it by .01. Most of the time those are people who believe they can "scare you away" with small increases... when they're actually just lowering everyone's profit without increasing the time their order remains on top.

.01 isking is simply the way the market works when sellers/buyers are all working primarily to maximize profit. (as opposed to other objectives like driving others away from the market). if it were actually botting... we'd see much quicker equalization in prices as 2+ bots would hit each other and drop the price .01 isk x the number of bots every 5 minutes.

And note... my initial response wasn't directed at the original post... but rather those who came after blaming "bots" for the .01 isk phenomena. If bots were as prevalent as people think we'd see many bot on bot pricing battles... and in the trade hub I live in (not Jita) that has never happened on any product I've traded in.

It's a silly claim I've heard often enough to become irritated by it... heck I have people message me in game accusing me of being a bot (which is funny because every time I update my orders I almost always screw up one so I don't move to the top of the list... I'm a really poorly programmed bot I guess).
William Ormono
Reason Will Prevail
#30 - 2017-03-20 17:45:54 UTC  |  Edited by: William Ormono
Scialt,

I had an encounter last night that helped me to see your point of view, and I’m coming around to see what you’re saying.

I had a guy undercut one of my orders last night in a manner that was pretty frustrating. The item he undercut was a highly contested item, with sell orders being updated by 0.01ISK about once every 12 minutes (an indicator that a lot of people were trying to outbid each other – there was a healthy margin on this item, so it made sense). Then this yahoo comes along and undercuts us all by 5 million. That 5 million bought this yahoo the same 12 minutes of being the top order that everyone else before him got (for a much lower 0.01ISK). As soon as I realized I wasn’t top bid but there was still money to be made, I undercut him by 0.01ISK (and then everyone else in the bidding war followed suit).

It was my first time experiencing that, but it was definitely annoying. If only he stuck to penny trading (ironic statement given the name I gave this post, I know) we all might have made more ISK. I still stand behind the fact that I don’t enjoy penny trading, but I obviously partake in it (out of necessity – I don’t know how to be a profitable trader otherwise), but I'm starting to at least respect it for what it is.

Those damn bots though.
(jk)
Scialt
Corporate Navy Police Force
Sleep Reapers
#31 - 2017-03-20 18:19:18 UTC
William Ormono wrote:
Scialt,

I had an encounter last night that helped me to see your point of view, and I’m coming around to see what you’re saying.

I had a guy undercut one of my orders last night in a manner that was pretty frustrating. The item he undercut was a highly contested item, with sell orders being updated by 0.01ISK about once every 12 minutes (an indicator that a lot of people were trying to outbid each other – there was a healthy margin on this item, so it made sense). Then this yahoo comes along and undercuts us all by 5 million. That 5 million bought this yahoo the same 12 minutes of being the top order that everyone else before him got (for a much lower 0.01ISK). As soon as I realized I wasn’t top bid but there was still money to be made, I undercut him by 0.01ISK (and then everyone else in the bidding war followed suit).

It was my first time experiencing that, but it was definitely annoying. If only he stuck to penny trading (ironic statement given the name I gave this post, I know) we all might have made more ISK. I still stand behind the fact that I don’t enjoy penny trading, but I obviously partake in it (out of necessity – I don’t know how to be a profitable trader otherwise), but I'm starting to at least respect it for what it is.

Those damn bots though.
(jk)


I had a different experience this weekend. I was trading a product where the margin had dropped precipitously to the point it was getting close to break even for me. Not there yet... but close. I had an order that was now well off the top of the stack that I hadn't followed the price down with.

I was going to be away all weekend (grandmother turned 100 this weekend)... but just decided to leave it and deal with it when I came back.

When I came back the price was still about where it was... but my order had sold at the original price (apparently having come up and gone back down over the weekend).

So... there is some truth to the idea that you can just list at a price and ignore it for a week at a time if you know the general market fluctuations and ignore the .01 isk effect. It's slower... but it also requires less attention (always a good thing).
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