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TornSoul
BIG
Gentlemen's Agreement
Posted - 2010.08.30 23:13:00 - [61]
 

Edited by: TornSoul on 30/08/2010 23:13:31
Originally by: Akita T

As for the actual possible short-term scenarios, my guess is that it will wiggle a bit around 55k, drop a little, then go towards 60k (which is a "bigger, rounder" number compared to 55k).
Also, as you noticed, transaction volume is fairly steady, and if there's any manipulation attempt, it's smaller scale, and on the back of a natural upwards trend.



This.

And I bet we'll see the same patterns when we hit 60K - and then 65K and then...

Techn is a new (new being important) bottleneck (and I don't really see the models taking that into account)

It's still to find it's "real" price.

We'll see "resistance" at each BRN imo.

But I'd be willing to bet a fairly large amount of ISK that 60K isn't the limit. By far.

The constant volume supports this imo.

Last couple of days I've seen all sell orders below 55K being wiped, and the buy orders are sloooowly moving up.

Once we break 55K, we'll see that pattern repeat (with 60K) and so on.


70K? 80K? or higher? Who knows.



Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.30 23:33:00 - [62]
 

Quote:

Techn is a new (new being important) bottleneck (and I don't really see the models taking that into account)



There's no model, just price action.
It's not a Quant simulation, it's just looking at current patterns for close term prediction. As you well know, price action is used to determine the next *few* bars, not a long time term.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2010.08.30 23:39:00 - [63]
 

Edited by: Akita T on 30/08/2010 23:52:29
Originally by: Vaerah Vahrokha
I did not do long term because I am relatively new to the game so I don't know Technetium story before the yearly graph. I see it used to be almost free (dupe exploit iirc?), then an huge peak, and now problems begin.

Nah, the dupe exploit thing was waaaay before that, and it involved Dysprosium and Promethium mainly.

The significant story of Technetium begins about here and stretches on and on and on... Wink
TL;DR :
It used to be a moderately valuable moon mineral (3rd best but far away from the top, then it dropped to 5th place for half a year when alchemy was introduced and cadmium/chromium got pulled upwards), so it was likely gathered in noticeable quantities that kept on stockpiling (stockpiling slower than other less valuable ones though, while Dysprosium and Promethium were being almost fully consumed).
Then all of a sudden, we get the Dominion expansion, and everything changes, its demand more than doubles practically overnight while the previous reigning "king minerals" demand (Dys/Pro) drops to barely a third of what it used to be very fast... and now the overall situation is reversed.

Neodymium has a similar story, but slightly less "violent", and with much more forewarning thanks to some CSM preliminary info leaking.

If anything, the situation with Technetium should be somewhat similar to that of Guidance Systems post-PI. Not quite the same, but close.

Originally by: Vaerah Vahrokha
Quote:
Techn is a new (new being important) bottleneck (and I don't really see the models taking that into account)

There's no model, just price action.
It's not a Quant simulation, it's just looking at current patterns for close term prediction. As you well know, price action is used to determine the next *few* bars, not a long time term.

But it should help you get better accuracy if you are at least able to have an educated guess on the general underlying trend, shouldn't it ?
In this particular case the big//main trend is "slowly but surely going up, with disturbances".

Toilarmius
Minmatar
Auxilia Enterprises
Posted - 2010.08.31 00:30:00 - [64]
 

All very interesting. Being both new to the game and interested in the Mfg, Industrial, Market side of things, I have some observations/questions.

Firstly, I buy into charting. I do it in RL and it works for me, so I see no reason why it wouldn't work in Eve, perhpas not on the same level. With that being said, here are a few observations/questions in no particular order.

1.Is part of the goal of this at any point in time to have folks try it out and report back their results?
2. How would you account for those folks that are just lazy/don't care? This being a "simulation" people tend to be more cavalier with their fake currency, in this case isk. There is this in RL also, but I would suspect more so in a simulation.
3. It seems to me that this being a much smaller environment, older, more established players with sufficient amounts of ISK could more seriously impact this market than any named group of investors in RL. I don't believe that aspect could be accounted for in any way.
4. I fully concur about not being able to shortsell items and the impact that has. I believe that is more key than you are giving in your posts. It would be very interesting to see the impacts of being able to shortsell. You could seriously manipulate parts of the market from that action alone.

Thanks for taking the time to put together very interesting information. I will follow this thread for future information as well as for any tips to possibly give me an edge in trading, etc.

corestwo
Goonfleet Investment Banking
Posted - 2010.08.31 04:34:00 - [65]
 

Originally by: Toilarmius

2. How would you account for those folks that are just lazy/don't care? This being a "simulation" people tend to be more cavalier with their fake currency, in this case isk. There is this in RL also, but I would suspect more so in a simulation.

Well, if their um..."not caring" or laziness goes too far, its just potential profit for someone(s) who cares more.
Originally by: Toilarmius

3. It seems to me that this being a much smaller environment, older, more established players with sufficient amounts of ISK could more seriously impact this market than any named group of investors in RL. I don't believe that aspect could be accounted for in any way.

Yes. Razz

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.31 10:15:00 - [66]
 

Edited by: Vaerah Vahrokha on 02/09/2010 12:09:46
Edited by: Vaerah Vahrokha on 02/09/2010 07:16:04
Quote:

But it should help you get better accuracy if you are at least able to have an educated guess on the general underlying trend, shouldn't it ?
In this particular case the big / main trend is "slowly but surely going up, with disturbances".



You have to understand that TA is discretional but not an irrational vodoo magic, where you see what you want to see or what's "obvious" to see.
You learn this simple truth at your first hundreds dollars / euros losses per trade when "market goes the wrong way!".

Market never goes the wrong way, it's the expectations the individuals put onto their *own* beliefs (projected outwards to the market) who damage them.
It's the same impulse that creates head and shoulders, it's hype.

I am not covering hype in this thread.


Example: what you or I see starting about 1 Feb (after the initial spike settled) looks like a slow upward trend indeed.
It's just "logic" to think it is.

But it's not how analysis works. It requires elements of confirmation, usually multiple of them forming a so called "confluence" that shows a focus on a certain price range, often centered around a round number and / or a Fibonacci retracement.

Now let's look with a critic eye to the graph. Data before 20 April constitutes a triangle, a dampening effect of the big spike. After that triangle we have one confirmation of a trending up momentum provided by the break out happened at 40k at around May 17th or so.
As you will easily notice, at 40k it created a super powerful pivot line.

But this is the last price we can keep as "sure". To be a significant pivot line and play support for future pricing, we need 2+ past history price points.
Now, the large spike is the only historic reference, it shows indications of price (unsurprisingly) favoring 40, 50 and 60k.
But it's too little to subscribe 50 or 60k as Sure Future Price Support, that peak was an anomaly.
Therefore, while I can educately guess exactly what you think, I cannot "certify" it, there's too little historical data points and I can't perform Fibo retracements which would spell some more accuracy.

Here is what I could see:


Picture linkage


The red arrows show the trend.
As you can see, it starts as a dampening motion, consolidated a lot (whole April) at one price level therefore it gained momentum to push up and break out around May 1st. It tested a previous level (I think it's around 54k, earlier touched during the big spike) and then price started pushing up but being rejected down.

The thin white lines represent the attempts to climb up made so far.

The underlying cyan trendline would be the support for fair price. I did not want to add further clutter on the graph but you can easily see how the 35k and 40k highs constitute a channel. This channel breaks before the last 3 pulses to higher highs, this means speculation started there.

Now, as I have said above, I can see this upward channel going up and eventually going parabolic and lead to head and shoulders but it's too soon to know, volume does not confirm it's pure speculation and the upwards slope is still too horizontal.

So, I simply don't know what's next. I just know that it's brewing up. When volume will drop to 1/3 and the slope will climb to 60 then it'll be the telltale sign speculation took over.

Image changed to URL. Zymurgist

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.31 10:28:00 - [67]
 

Edited by: Vaerah Vahrokha on 31/08/2010 11:00:34
What I can see is price failed at 70k in the past already and this will be a thougher nut to crack than 60k (you can see 60k in the first spike too).
How much harder, I can't know. In RL I could usually see recurring pivots across years of history, here I have *1* data point. Too weak.


Edit: an alternate solution that price could temporarily take if it keeps getting rejected down, is to go lateral for several days again in order to gain momentum. But you can see with the new price channel, volume decreased vs the previous more horizontal channel and overshooting / oscillations show more weakness and volatility. So, we could see a new "step up" but it'll be weaker than the others and will possibly start shooting up for a last try later.

- - - - - - - - - -

Quote:

1.Is part of the goal of this at any point in time to have folks try it out and report back their results?



It is, ATM my RL commitments are too heavy to try it.


Quote:

2. How would you account for those folks that are just lazy/don't care? This being a "simulation" people tend to be more cavalier with their fake currency, in this case isk. There is this in RL also, but I would suspect more so in a simulation.



I think mainstream low speculation and high volume meet nicely at Tritanium and similar commodities.
These shown here are niche or "high level" markets instead and they get played at every opportunity.


Quote:

3. It seems to me that this being a much smaller environment, older, more established players with sufficient amounts of ISK could more seriously impact this market than any named group of investors in RL. I don't believe that aspect could be accounted for in any way.



They are playing exactly like banks and hedge funds do in RL: they make the market, the others follow.


Quote:

4. I fully concur about not being able to shortsell items and the impact that has. I believe that is more key than you are giving in your posts. It would be very interesting to see the impacts of being able to shortsell. You could seriously manipulate parts of the market from that action alone



You CAN sort of shortsell. You CANNOT naked shortsell. This is an huge difference.

Shortsell as "borrow a security, sell it and deliver it later" is perfectly simulated by mass dumping previously held stock and buying it back shortly afterwards.
This is how some huge RL institutions short markets without shorting.

IE someone with 20B in a certain item (I know of a SCC Lounge guy who plays with T2 items like that) can quickly crash a market effectively causing the same effects of a furious short sell cascade, wait for small fries to dump their little stuff and then cheaply buy it back and keep the difference. It seems a little thing but look at my previous examples where I have shown making 700M with just 3B of investment playing the market dips like that.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2010.08.31 12:09:00 - [68]
 

Edited by: Akita T on 31/08/2010 12:14:05
Edited by: Akita T on 31/08/2010 12:11:55
Originally by: Vaerah Vahrokha
[...snip...]
Here is what I could see: Picture linkage
[...snip...]

I have to be honest, my interest in TA is slightly below casual hobby level, so I can't honestly say I can even follow more than 66% of what you're trying to say (let alone make good use of it) Wink
What I think I might be seeing...
What would you make of my (highly amateurish) alternate interpretation of exactly the same thing ?
Note : well, as a general idea not actual look-and-feel -> the "triangles" of ups and downs near BFRNs with "top angle" slowly tilting... is that even any sort of "pattern" at all ?

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.31 13:17:00 - [69]
 

Edited by: Vaerah Vahrokha on 02/09/2010 12:10:54
Originally by: Akita T
Edited by: Akita T on 31/08/2010 12:11:55
Originally by: Vaerah Vahrokha
[...snip...]
Here is what I could see: Picture linkage
[...snip...]

I have to be honest, my interest in TA is slightly below casual hobby level, so I can't honestly say I can even follow more than 66% of what you're trying to say (let alone make good use of it) Wink
What I think I might be seeing...
What would you make of my (highly amateurish) alternate interpretation of exactly the same thing ?
(note : well, as a general idea not actual look-and-feel)



TA is used to determine short term "hot spots" where an investor would choose to enter in the market. They are usually turning points where pivot lines, trends and other factors converge to a tight range enough to allow for an acceptable equity drawdown once entered in a position.

As of today we are "right before" one of those spots where you could draw your stuff to have a more precise idea. IE we have firstly to wait either for a break out or a consolidation, those give a clearer direction of where price is going to go next.

Without that, we can just speculate and then your picture is as good as any. What I'd see as more plausible is that markets are human's psychology translated into price, therefore they have an evolution, a "life".
Your graph shows subsequent steps up that repeat themselves and even reverse their slope. This does not happen (unless external big factors happen), market sentiment tends to work like a positive feedback mechanism, so you'd see shortening and rising steps till a collapse or steps would "give up" and go horizontal or even downwards in a progressively elongated way.

Anyway here's another look, at the last days.


Picture linkage


Since it's a short time frame I manually joined the price dots (the SMA is too approximate since it's 5 days) with a thin cyan line.

You can easily notice how after some testing of the 50k resistance. Pivot lines approached from below act as resistance, are tested again and again then if price manages to perforate them you usually see a break out and now the same line acts as support, that is it keeps price up.
After some testing, the price performed a retracement @50k on Aug 17th then the line got violated on Aug 18th. The ensuing momentum (100% like a real market BTW) spiked to 55k but lost steam and formed a pretty bad Pin bar (aka Pinocchio bar, a bar which "lies" and reverses price action) in the same session.
A guy with some practice can almost always play pin bars for decent profit BTW.
Still in the same session, price tested 50k from the up side and made it a support pivot.

Further oscillations (that make me doubt about how much steam is left in this trend, it should be steadier and smoother) slowly push price up.
If you followed this talk till now you can easily see how price reaches, tests and perforates further resistance lines and makes them support by testing them at the next swing down.

At Aug 30th it spikes again like it did at Aug 19th. The last 4 days seem to describe a new pivot line (1k over the others, like since 50k) that I did not draw.

Image changed to URL. Zymurgist

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.31 13:21:00 - [70]
 

Edited by: Vaerah Vahrokha on 31/08/2010 13:25:43
Now, what makes me wonder is how you can see how quickly price reached 30 then 40 then 50k but now it's slowed down to a crawl and its only suceeding at gaining 1k per breakout.
The recent Doji bar (price does large swing but the session / day closes at identical price of open) shows confusion and indecision by the players and a possible soon reversal (if doji bar is confirmed).

This is why I cannot tell you what's happening next. The market does not know yet.

Remember - as a wise teacher told me - in order to trade we have to be ready for the market but the market has also to be ready for us. ATM it's not.

See, I would have dumped 3B on Aug 19th without a blink, but I'd be totally exitant doing it on Aug 30th. And the market with its bars is exactly telling this: "we collectively don't know what to do next".
Coincidentally given the fractal nature of markets, notice how Aug 27th price onwards is describing a little head and shoulders.
If price tomorrow fails to make an higher high, it's possible we'll assist to a reversal.

Big traders motivation and beliefs would then either make such reversal a temporary dip before a continuation or (if they lose confidence and start selling) they will start the large head and shoulders descent to hell.

Akita, Tornsoul and other large traders (if you are in this market): it's YOU who can make this market. You have to ask yourself, your conflicting greed and fear about what to make next.
The market will reflect YOU. This is a luxury we don't have in RL markets, but here you are the ones deciding whether the trend will go up or not.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2010.08.31 13:23:00 - [71]
 

Edited by: Akita T on 31/08/2010 13:33:24

BTW, the "50k ceiling" in the Aug 13 -> Aug 18 period, that was my fault...
...I was curious to see what happened if I just let a big chunk sit on sale at exactly 50k Twisted Evil

P.S. It's probably easier to see here on evemetrics.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.31 13:27:00 - [72]
 

Edited by: Vaerah Vahrokha on 31/08/2010 13:30:04
Originally by: Akita T

BTW, the "50k ceiling" in the Aug 13 -> Aug 18 period, that was my fault...
...I was curious to see what happened if I just let a big chunk sit on sale at exactly 50k Twisted Evil



I am not surprised the least. You are a market maker there, therefore when I read the market, I read you.


Edit: and in fact you are now asking me about what's next because you can't decide what to make the market do next. Your greed is turning in fear, you know the rally down to hell might be close and this makes you ask me about what you want to do.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2010.08.31 13:35:00 - [73]
 

Edited by: Akita T on 31/08/2010 13:41:53

More like, should I bother forcing the price to the next BFRN, or should I just wait for it to get there Twisted Evil
Since, you know, on one hand :effort: + $Ka-Ching$, but on the other hand, I waited this long (and hardly strapped for liquidity), so I can easily wait some more.
Not so much greed right now as just seeing how I could screw with it Razz

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.08.31 13:41:00 - [74]
 

Originally by: Akita T
Edited by: Akita T on 31/08/2010 13:39:12

More like, should I bother forcing the price to the next BFRN, or should I just wait for it to get there Twisted Evil
Since, you know, :effort: Wink



Given its current lack of steam, it'd probably need some babysitting off yours.
Needless to say, once you'll stop... BOOM!

Akita T
Caldari Navy Volunteer Task Force
Posted - 2010.08.31 13:45:00 - [75]
 

Edited by: Akita T on 31/08/2010 14:07:01

Originally by: Vaerah Vahrokha
Given its current lack of steam, it'd probably need some babysitting off yours.
Needless to say, once you'll stop... BOOM!

I guess it would depend on the length of babysiting, no ? (My personal brand of "babysitting", that is, heh).
If I keep doing it until the trend is about even, I could probably liquidate most of the stock before fully dumping the support... and then afterwards, yay, cheap restock Twisted Evil
...or not Laughing

"Just waiting" is so much easier... but noticeably less profitable.
Before Aug 13, my previous Technetium transactions were low-volume sells in March for liquidity purposes (and because I like having a remaining stockpile that is a very nice round millions number by liquidating excess - the Aug 13 order was precisely 1 mil in size).
Yeah, I'm weird like that... and as far as market subtlety goes, WHEN I act (seldom), I tend to have the grace of a baseball bat to the kneecap (or the diplomacy skills of the Mongol hordes on the move, if you prefer) Smile

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.02 05:31:00 - [76]
 

I am in the process of restructuring the thread. If you find any broken links or clipped articles please let me know here.

Celi Annor
Posted - 2010.09.02 06:00:00 - [77]
 

Edited by: Celi Annor on 02/09/2010 14:59:13
I skimmed this thread Vaerahh and with regards to technetium.

The difference between eve and RL is that in eve there are many products that can come from technetium. Look at the price of fullerides, it just spiked. This will cause increase demand in technetium because the reactions are very profitable atm. Conversely, in RL, this type of products IRL rarely exists. (well physical gold --> gold futures --> GLD maybe)

Technetium producers are reacting it themselves for the most part. But if you also understand pos mechanics, technetium ---> fulleride reaction chain per gallente large is by far the most efficient and profitable reaction chain possible. Thus people utilizing this reaction chain is way more common than others. Driving demand way up.

Akita mentioned 100k+ for technetium, I am pretty sure the NC is withholding a lot of stock (they are reacting it themselves) and its pushing prices higher. The trend and demand is strong and I offloaded a portion of my stack (2mil units) over the last few days by destroying any buys above 50k while simultaneous selling 1k below lowest sell. I failed to drop it. With this kind of demand... i see 70-80k no problem.




Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.02 20:08:00 - [78]
 

Edited by: Vaerah Vahrokha on 02/09/2010 20:30:52
I have been mailed and also asked on SCC further explanation about support, resistance and trend lines.

Here's the easiest, picture-a-plenty and valid explanation I found so far:

Linkage

It'll require a (free) forum registration to let you download the small-ish PDF, it's definitely worth the effort.
While at it you may also explore the babypips.com site, it's highly valid and didactical.


Edit:

Go check Robotics and compare it with the previous post about it:

Linkage

corestwo
Goonfleet Investment Banking
Posted - 2010.09.03 00:12:00 - [79]
 

Originally by: Vaerah Vahrokha
Edited by: Vaerah Vahrokha on 02/09/2010 20:30:52


Go check Robotics and compare it with the previous post about it:

Linkage


I was actually curious about that...did you mean "danger zone" as in "watch for a spike" or danger zone as in, watch for it to suddenly drop in price because the reduced volume indicates a lack of interest? Wasn't quite clear. Wink

Mini Tee
Posted - 2010.09.03 01:16:00 - [80]
 

Why are you letting all the 'secrets' out? Embarassed

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.03 06:45:00 - [81]
 

Originally by: Mini Tee
Why are you letting all the 'secrets' out? Embarassed


Because these "secrets" are quite available to anyone willing to spend some days in research.
Because despite the appearances, despite the trolls and the irrelevant nitpickers MD is a great community that gave me much and therefore I want to give some back.

RAW23
Posted - 2010.09.03 09:09:00 - [82]
 

Interesting thread, although for the technetium analysis I have similar concerns to those outlined by TS at the top of page 3. Would it, perhaps, be instructive to carry out an analysis on Guidance Systems as a test case? Here we have a good example of a product that we, more or less, know where it will end up in the long term (barring any changes at CCP's end). It also has some of the characteristics of Technetium, as Akita noted. It would be interesting to see what reading the charts would predict for GS, then, as lessons might be learnt for reading the less predictable future of Technetium (got to say that a crash to 30k sounds unlikely and seems to be based on the assumption of considerable volumes of speculation?).

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.03 09:44:00 - [83]
 

Originally by: RAW23
Interesting thread, although for the technetium analysis I have similar concerns to those outlined by TS at the top of page 3. Would it, perhaps, be instructive to carry out an analysis on Guidance Systems as a test case? Here we have a good example of a product that we, more or less, know where it will end up in the long term (barring any changes at CCP's end). It also has some of the characteristics of Technetium, as Akita noted. It would be interesting to see what reading the charts would predict for GS, then, as lessons might be learnt for reading the less predictable future of Technetium (got to say that a crash to 30k sounds unlikely and seems to be based on the assumption of considerable volumes of speculation?).


About Technetium, I'd need a RSI indicator to at least gauge if the trend is slowing down and showing what's called an hidden reversal (a telltale sign about how soon a *possible* inversion is going to happen). With what we are given, all we can do is to connect the yellow dots and seek for the week where the price stops making higher highs and starts making lower lows.

About GS, a lot could be said (atm I don't have time). Suffice to say the 5.5k - 6k PPZ used as resistance in the beginning, is now acting as support. PPZ is another lingo term indicating "Pivot Point Zone", which is used when there are a "cloud" of close pivot lines that form a sort of rectangle (5.5k to 6k) instead of a line.

As for long term, projected settlement prices and so on, it's not the aim nor in the powers of TA.
If something like this existed, there'd be many rich people. Long term is still in the hands of fundamental analysis, i.e. first hand in depth knowledge of the specific market and what effects the patches had / have / will have on it. TA based on price action (there are several TA variations out there) looks for telltale signs in the form of short term patterns and use them as indication "something" is going to happen soon. Once you know something happens, you must draw / figure out the 2-3 possible price paths and create a plan for each of them. You must enter the trade early and without indecisions else it WILL retrace and revert in your face, having a ready plan before taking it may make a difference between a good trade or an horrible slap in the wallet.

Mini Tee
Posted - 2010.09.03 13:42:00 - [84]
 

Originally by: Vaerah Vahrokha
Originally by: RAW23


As for long term, projected settlement prices and so on, it's not the aim nor in the powers of TA.


For longer term you can just use a bigger timeframe in TA, the patterns that work on 5m 15m also work on Daily, Weekly and Monthly charts.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.03 14:28:00 - [85]
 

Edited by: Vaerah Vahrokha on 03/09/2010 14:50:22
Originally by: Mini Tee
Originally by: Vaerah Vahrokha
Originally by: RAW23


As for long term, projected settlement prices and so on, it's not the aim nor in the powers of TA.



For longer term you can just use a bigger timeframe in TA, the patterns that work on 5m 15m also work on Daily, Weekly and Monthly charts.


This is wishful thinking in the TA we can do in EvE.

- We have no "5m" bars, the granularity we get 1 day => 1 year. So it's quite difficult to see intraday patterns unless collecting data in a way I CBA to spend weeks to write code for.

- Beyond one year history is generally impossible to see and it'd be quite useless because of the huge changes that patches implement to fundamentals of economy.

- The context people want to see TA in EvE (and this is the real reason why I say TA can't do it) is to have a nice and accurate future predictor that gives them reliable tips about what will happen in the next 3 weeks. No can do, not even in RL, not even applying patterns.
You need to enter trades with surgical precision, in RL with vastly more and better instruments and available precise history, you are happy to enter a weekly bar trade with several dozens of ticks / pips of tolerance (read: from $10 to > $31 per tick / pip tolerance), a trade you take like 1 day after price action confirms the pattern, not 2, 10 or 100. In EvE you'd have a variance of like 30% over a medium period, this could completely reverse any markup you planned to get.

Example: imagine I see a triangle pattern forming over 2 months. People will expect I tell them the day and hour when there will be the breakout of it and its direction, for some reason they put too much hype in this (exactly like they mistakenly put hype in believing audits give sure safety or like many believe hi sec = lawful place with no aggressions).
If you don't see this, look above: people predicting prices going up to A, B or C with no clear price action to tell and then they call me to tell "the medium term future" or even what definitive price an item will get in the long term. No can do.

Mini Tee
Posted - 2010.09.03 15:25:00 - [86]
 

Yeah sure, I talked about TA in general, not TA specifically in EvE.
In general the patterns work everywhere, and you can apply almost every pattern to EvE, while taking the items special properties into consideration (artificial price floors etc).
And yes, all you can do with TA is map out the probable path of price, when you are right 60% of the time you are doing a good job already.
Also people asking for definite prices in the future or where price will find it's medium won't ever get an answer. It's not like there is THE price that an item will go to and just stay there until the next patch comes out. Fundamental and technical analysis can't answer this question, because there isn't one definite answer.

Like, I'm happy when I can predict a 10%+ move with 50% accuracy, with good risk/reward. For example I bought Tripped Power Circuits at 24k, and sold them at 35k. Sure it went way higher, but I got my money so I don't care. Razz

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.03 15:42:00 - [87]
 

Edited by: Vaerah Vahrokha on 03/09/2010 15:42:28
Originally by: Mini Tee
Yeah sure, I talked about TA in general, not TA specifically in EvE.



In this experiment #01 I am specifically treating TA applied to EvE. Knowing how some guys love to spot every single crack in every thread, it's why I put so many disclaimers and distinguos everywhere.

Quote:

In general the patterns work everywhere, and you can apply almost every pattern to EvE, while taking the items special properties into consideration (artificial price floors etc).



This is something I suspected as well. Not seeing anyone ever having attempted to bring in some tangible evidence to deal with this hypothesis, I started my own experiment. I have to say I am impressed as it's going beyond what I thought. I planned to just post till the Gallente Starbase Charters breakout and that's it, then people started throwing me tempting ideas and I just HAD to chart them. Lo and behold, the thing seems to bring in results!

Quote:

And yes, all you can do with TA is map out the probable path of price, when you are right 60% of the time you are doing a good job already.



The best RL trader using price action I "know of", James16, has something like 85% positive trades outcomes. I wish I could be half as good.


Quote:

Like, I'm happy when I can predict a 10%+ move with 50% accuracy, with good risk/reward.


R:R (risk vs reward) plays a beyond fundamental role at profitability. I am the first doing completely arsed trades where R:R is way too low (and promptly get horribly punished by the RL markets), so I know too well what you are talking about. I might expand further on this crucial aspect of speculation with more posts, it IS possible to gauge short term probable R:R knowing about figures, PPZ and patterns.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.04 12:26:00 - [88]
 

Edited by: Vaerah Vahrokha on 04/09/2010 12:26:19
Security and risk vs reward


As per the post above, I was planning some brief mentions about factors that people usually overlook.

The feeling of the potential for more and more ISK in the wallet is always good.
This is actually one of the two pillars of trading: greed and fear (supply and demand are fundamentals but less incisive than greed and fear. Just look at all the wild speculation and heads and shoulders).

Now, greed tends to push fear away, often irrationally so.

But both in RL and EvE markets, we must keep a firm grasp about how risk is always awaiting us in a dark alley somewhere close.

Let's see how to approach the whole matter in a rational way.

In order to trade or to invest (in bonds, IPOs...) we must have sound:


1) Trading / investing system

2) Sound risk management

3) Sound money management

4) Sound psychology of trader / investor.

Notice how the list is numbered by order of appearance in most treaties or books but NOT in the order of importance. In order of importance, the list would be reversed.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.04 12:29:00 - [89]
 

Edited by: Vaerah Vahrokha on 04/09/2010 12:29:52
4) Psychology of the trader or investor

Neither trading nor investing are hobbies. Even in EvE. Even if EvE is an hobby, a game, you can still lose and lose a lot. Now, I am sure that you don't want to roleplay a *broken* tychoon, do you?
Trading and investing are business. Ruthless and potentially risky business. A business has to be approached in a professional way, otherwise you are just a buffoon with too much money and you'll give it to those who are better prepared than you.

One of the first things you could learn in RL trading is the sick gut feeling you get when you suddenly lose a bunch of money in a wrong trade.
This is why so many fail, it's a though profession, not a "spare time entertrainment". There are no free meals.

Therefore you must come in prepared. You must discount the losses, accept they WILL be here, never be in denial.
Check recent Bad Bobby scam. People will just refuse to believe ONCE AGAIN it happened and it happened exactly to over self estimating self egos.

So, setup your mind in an healthy approach, where losses are seen as cost of operation and the target is to take home more than it's lost.


For those who want to have a concrete look at what I am talking about, please refer to those two priceless sources:

- Mark Douglas: Trading in the Zone, an universally acclaimed essay about RL trading psychology that may also help in EvE.

- James16 Group: their guest (free) material is stories and stories higher quality than 90% of the paid material available on Internet.
In particular there's a rare series of psychology video in Fijitrader's column.

Notice how just to "get" to know what material is not trash took me formidable efforts and costs, don't discount this advice just because it's given in a video game.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.09.04 12:36:00 - [90]
 

3) Sound money management

Yes, EvE is but a game.
Yes you just lost 8 hard earned billions in the latest scam and it hurts. So?

So, exactly like for technical analysis I covered in the former posts, other RL factors are intimately present in EvE and make EvE THE ONE AND ONLY game where RL fades into fantasy so much.

Money management is a wild term that includes several things.

This principle holds HARSH AND TRUE both as trader and investor: don't put all your cookies in the same jar.

This has many ripple factors I cannot fully list here but I'll give a brief look to.

a) Money should be protected from being taken away in large chunks that hurt.

b) Money should be managed in order to stack and self compound over time.


Point a) Is dealt with by implementing a risk management setup, in order to be prepared in case of losses. See next chapter.
Point b) Is dealt with by implementing one of the several available investment strategies.
I am not going to cover the huge math and statistics behind martingales and anti-martingales and other easily "boring" (for a game) details.

I am going to suggest two simple ways though, that proved to visibly help at growing accounts.

Both are described in a great money management book by Ryan Jones:

The Trading Game

The first system is called Fixed Fractional Trading and the second Fixed Ratio Trading.

What do those big boring words mean IN MY EVE????

They mean the difference between bashing your head against a wall after the umpteenth scam or simply listing it as a managed loss, a simple running cost of your business.

They are two ways of self discipline forcing you to never invest more than a pre-calculated amount of you money. Be it in trading or investing.
If you invest 30% of your capital in the next bond, your chance to go broke (due to scams / defaults) in the medium-long run is exponential orders of magnitude larger than if you invest 2-4%.
If you keep risk to <= 4% per investment / trade, you are almost granted you will make money in the long run, it'd take a stupidly long streak of scams to make you broke.

Once you settle with this concept, the differences between the two proposed anti-martingale methods for an EvE player become of secondary importance. Going Fixed Ratio you play better, since you face even less risk than Fixed Fractional and still you get more income in the same time span.

I won't bore people with details further, I gave you the fishing pole, now get out and go earn the fish.



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