Market Discussions

Monthly graph

Link to graph


What Price is Doing (WPD)

Now let's see how much insight on a market we may get by simply looking at how it works on the long term.

Before 2010 megacyte tanked very hard. A shift in demand and offer, a patch, whatever the cause, altered the established equilibrium and price (P) dropped to a minimum, overshot it (something that happens quite often) and bounced back. Since then, price is ranging between 2200 and 3000 ISK pu.

What does this tell us?

1) That price is ranging on long term.

2) That we CAN identify a "now we are buying low" price level and also a "I am about to sell high" other price level. Of course they may and will change in the future but the current limits stay valid until the market will announce the new ones itself.

The purple lines show monthly support and resistance levels. For a very EvE friendly introduction to those concepts please check the sister thread How to read the in game EvE market charts, expecially this post.

One in particular line is expecially strong, 2900 ISK. It is so powerful that the all mighty monthly candles (each contain the whole market liquidity for one month!) stop and pause before it and use it both as support and resistance.
This is graphically highlighted by the little arrows showing the affected candle bars.
Actually, drawing those lines is all about finding swing highs and lows (see the above linked thread again, for details) and those "discontinuities" that affect price so much.

Other worthy price levels are 2800 and 3000. Not only they affected price but they are also "round numbers" and that reinforces their strength because traders themselves are slightly augmenting the already in place equilibrium between demand and offer. The round numbers are marked with yellow lines.

Now, we'll show how candle bars are NOT in contradiction with the in game market graphs. The knowledge you may acquire here or in the sister thread is basically the same and interchangeable as long as we don't go down to details the EvE graphs don't give us help any more (like exact market price action, something candle bars are excellent at).


Let's look at the same monthly graph, just a bit more zoomed and without those arrows. This time I am going to highlight the easily visible periods of Range Market (RM) that affect the trading closest to the current days.

Posting about megacyte on two different threads was not a random choice. You find the "easy" explanation about RMs at this post, and the same item in game graph shown here.

So you may make your own comparisons with your eyes.

From EvE to RL trading

I keep getting contacted in game, by people I have never seen on the forums.

Most of them are attracted by the same drive that made me perform the big jump from EvE trading to RL securities trading.

Now, we often love to hear or say that EvE is a cold, harsh world and pat ourselves about how nimbly we dodged the latest scam or how well we can manipulate a market. This puts these guys who want to experience RL trading in a self confident position, where they believe that being hardened EvE vets will help them once they do the big switch.

This is not true.

RL finance makes the worst of EvE look like an easy mode schoolgirl version of Hello Kitty Online.

Therefore, you who got curious about RL trading after reading my articles, beware! EvE is not the coldest or hardest world out there!


Some history

Until about 2005 you'd be at complete mercy of all sorts of scammers, some subtle enough to part your money off you.
They'd promise all sorts of "Proprietary Trading Systems" (some sold for thousands dollars) usually with colorful "Proprietary Indicators".
Once the Average-I-Have-Been-Scammed-Enough Joe smarted up, he started "back testing" those things, that is performing pretend trades with past data and checking if those "systems" actually would have worked.
Thus the next generation of expensive scams was born: apparently perfect indicators that passed all the back tests. Too bad they were "rigged" to properly respond to past data. Needless to say, when put in practice, those things would fail even harder.

In 2005 we see the first organized large scale and effective attempt at teaching how to trade with no attached scam.
A trader nicknamed James16 started a thread on a forum called Forex Factory and started explaining (for free) how to read price, how to take informed and responsible decisions, the importance of training for months before even starting the first trade.
Price reading and market understanding are important and are required to trade with profit. The rest is bells and whistles.

Now James16 is retired and rich enough to start building an USD 20M assisted and memory care facility for his town.

Since the first post, his thread has grown to almost 7200 pages, 108,000 posts.

There are now other traders who took James16 legacy, "distilled" the knowledge into a less daunting hulk and proposed their own vision of price reading.

I prepared a list that in my modest advice is all what a perspective trader (including EvE traders!) needs to become a profitable professional.

These last days I have been very busy writing down trading articles and tutorials.

The final objective is to add some more sections to my EvE Online and RL trading course.

It proved to be a very, very time intensive project, expecially since I have to test it both in RL and in EvE trading before I release the next chapters. Some parts are actually posted on RL trading forums, where they are scrutinized by real traders and they are quick to find flaws.

As my Twitter channel followers know, I prepared some new sections in the last days.

In particular now you may read:

1) The first, beta version of the official Trading Method text. It's written in a simple, sequential step by step format. In the coming months I will add examples, pictures and so on.

2) I started populating the trading course appendixes with stubs to the articles below.

3) I added an EvE Marketeer web site review, including a detailed how to produce graphs that may be used with the trading method.
The same howto also shows how to create CSV market dump data files you can import in Excel or in other trading platforms.

4) I updated the Multicharts tutorial to show how to use the data exported off EvE Marketeer to produce your own, highly professional and accurate charts with a proven RL trading platform.

5) As demonstration of the results you may achieve and also as reply to this statement:



I added a sample trade I recently closed. It required about 10B, not an incredible amount for "very few people" and netted about 2.4B of profit.

Even if a trader only invested 1B, he could still have got 240M out of it. 1B is really, really easy to have these days.

Consider the average MD bond: you give money to an unknown in the most harsh MMO, where scamming has no penalty.
Depending on trust and collateral, you get from 2 to 8 percent a month out of it, sometimes 10 percent.

This trade gave a profit of 23 percent over just more than 1 month. Here's a picture showing it in short.


Edit:

- converted percent signs because this pathetic forum breaks when using them.
- the trade made 23 percent not 24 because the capital used was not exactly 10B but a bit above that.

Thank you!

Posts like yours and like this (created while I was not playing) make me find new strength to keep posting my borin... ehm didactical stuff

I am going to post some thing soon(TM). I am searching in the past threads on some forums (hence my finding above) for some proofs.

Some little update

Seeing I have problems updating EvEMarketeer.com, I ran my good old data gathering software and got out a bunch of market data dumps that somebody could find useful. The files contain a bit more than one year worth of data and are provided in 4 formats: industry OHLC, simple CSV, Yahoo OHLC and Excel OHLC CSV format. The latter may be used with my free Excel graph template to show graphic price bars directly in Excel.

The data files are many and cover isotopes, minerals, T2 materials, PI materials and commodities.
A zip file containing the whole package may be downloaded from this location.

Longer term data files are also available for those markets but ATM they are not for the public.

For full details about how to import / use these data please refer to the old forums threads:

Experiment #03 On demand game market data and graphs

Completely free, possibly life changing, trading infos for everyone

As part of my EvE Online and RL trading course, you may find a very detailed and updated how-to import such data into a free trading platform called Multicharts Discretional Trader.


As you might probably know, I am very reluctant about posting what / when I bought stuff using my method, before I am done trading it. I'll make an half exception because I believe it's reasonably hard to manipulate some markets against me.

This is a partially censored screenshot of my Tritanium purchase (won't show Jita anything sorry), which is the latest of my minerals operations (some still going on).

Tomorrow I'll post a little market analysis with several possible entry points including the one I used, that were available in the past and in recent days.

Analysis on Tritanium


Monthly graph

None needed, all the candles are bullish.


Weekly graph

Given the data files above, this is the weekly graph for Tritanium.

It's possible to see some interesting behaviors. I'll explain the whole thing even if it's not needed (didactical purpose) to talk about anything before March.

The first objective of an analysis it to understand the market general behavior. The markets tend to give warnings before things happen, expecially the liquid ones that cannot be easily manipulated. We start from the higher time frames because both the bars and the price levels (see the "lines" I have drawn) are much stronger than the daily bars. Purple lines = made on monthly bars, cyan = on weekly, orange (if present) = on daily bars. Yellow = Big Round Numbers (BRN) that sometimes play a psychological role. When do they do that? Simple. If candles in the past stopped around them or even inverted the trend then those BRNs are true levels and to be taken into consideration in the bigger picture.

---

Didactical text begins

From March 2011 to Dec 2012 Trit was in equilibrium in a tight range (3.3 - 3.55). Tight ranges often signal about a large trend after they end (consolidation).
This range market (RM) formed a typical double bottom ("W shape"), a strong bullish pattern.

The range market got broken upwards and price retraced (= RET = went up then fell down and retested or re-hit the support). What used to be a strong resistance for many months (3.55) became support.
Traders who bought at this point, did a very safe operation, this RET is what's needed to confirm the double bottom being true.

3rd week of January, price quickly rose up to BRN 4 where a number of traders took profit for 2 weeks. This is shown by the candles not being able to close above BRN 4. The "wick" above 4 is tall, meaning sellers managed to keep pressure for a good while.
Sellers kept dumping on the next candle bar but buyers found it to be a good opportunity to buy (like it's happening right today).

Buyers failed to bring price above 4 but succeeded closing the candle a bit above the week before candle = chance to win.
It'd be very imprudent to buy right below 4, despite that candle is a strong bullish PB (pin bar). Yet demand was > supply enough that some risked and succeeded. Next weeks we see buyers dominate sellers till 4.56, where a lot take profit. I did not check but I am fairly sure 4.5 was a top price we have seen when I started playing EvE.
Markets have very long memory, in some ancient RL tickers we can see similar halts when price reached 30 years old thresolds.

Why does it happen? Because the first time the market stopped there because it was the perfect demand vs supply level, from that date onwards either it's again the same perfect demand vs supply level or the investors believe it will be again a perfect demand vs supply level (the result is similar, the bigger the investors the bigger it becomes true. Also see Self Fulfilling Prophecy and principle of Reflexivity).

Due to the sales, price fell down and last Feb 2012 week it formed a bullish PB at 4.40.
The two price levels 4.40 - 4.56 are respectively support and resistance of tight range market. In RL a trader would buy that PB and only hold stock till price hits the resistance at 4.56.
In EvE there are no leveraged, 4 decimal digits market, so price just breaks through while people still hold the stock.

As you can see, the next week RM's resistance was broken with a "spinning top" bar, that is indecision (see both bar "wicks" are equal and big).
Buyers won again (the bar closed above the RM), retraced back to the previous 4.56 resistance now becoming support and formed an IPB. I won't explain the IPB (inverse pin bar) because it's very complex. Suffice to say they work as PBs in a complimentary way: exhaustion of sellers instead of predominance of buyers.

The next weeks price went "hyperbolical". It means it's fuelled mostly by greed vs fear and not by actual demand vs supply. The IPBs often happen right before such times.
During the hyperbolical phase price becomes unstable and whimsical. This is why BRN 6 stopped it. The fight between buyers and sellers will be harder than before. It's the game of price discovery, losing strength till it finds a new stable equilibrium where it will range again and take a breather.

Didactical text ends

---

If the graph was posted when I bought Tritanium (March 26) then all it'd show as last candle would have been the PB 2 candles after the IPB.
I should have bought Trit earlier but at the best time I was not subbed and then all my money was out in investments so...

Anyway, that PB closed below BRN 5 but above the IPB and the big candle "refilling" it.

Seen a favorable market situation, and seen monthly bars concording with weekly bars, the trader (both RL and EvE following this method) switches to the daily graph and (only there) he seeks for an entry point / trade opportunity.

Therefore I swiched to the daily chart and went to see what was going on March 20 (when I started looking for Trit deals).
This will be part of the next post, that will appear later today (RL calls).

I can't tell you how happy it makes me that you provided a list of finance books to check out.
Thanks

Please check also the last pages of the old forums thread, it's linked in the OP and explains more about this stuff.




There are two factors.

1) Each market is a bit shifted in time due to the many production chains affecting each other. The most straightforward happen to be the best to trade with this swing trading method. Like in RL, players generally mine / whatever during the week and dump during the week ends, so you might want to set your first day as Monday. But you should check the swings by yourself, if you see a price dip each Saturday and then prices take off again on Sunday, then that would be your best day for a new week.

2) Candles just represent what the market is doing. As such the day the weekly ones refer to is not totally relevant. If a market is trending up, shifting by 1 day could morph that bullish pin bar into a bullish outside bar. That is, the overall patterns change their name and shape but not what they are telling you: to buy. Some times you indeed get adversely affected and get some faceless general bullish bar with no pattern but this would just happen some other week if you had picked a different starting day. It's still best advised to find the proper first day though, as they tend to give the clearest patterns of all.




There are several ways to synthesize open and close prices given the current cache data that also need some smart data sanitizing. It's well beyond the scope of this thread to explain that stuff. Suffice to say that me or websites like EvEMarketeer provide for that stuff to everyone, just download from there. I expecially cooperated with the EvEMarketeer developer to have his OHLC data dumps as exact as possible.

VV, how do you do that Candle graph? Free Eve API app?

Thanks

VV I love your work, this is no criticism, are you sure this multicharts still has a free version? - I followed the link and it redirects to the company main page. Not so easily discouraged, I looked around the web site but I couldn't find a free version referenced anywhere (not even in the product comparisons).

I have found an alternate which works for me (and) I ended up loading up with RL market data as well

I just thought it was worth mentioning in case I'm missing something or it has changed


Edit, fixed tags