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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.26 22:55:00 - [211]
 

Update on Robotics


What's going on

Since the last post, price has dropped. It pushed thru the cyan upper channel line and got rejected up as shown in this graph: Picture linkage

This is a typical scenario that happens a lot in RL markets as well. It is a sum of an incredible amount of factors, such as:


- Feigning (bait and switch) / manipulating market to entice people to sell, grab up the stock and relist.

- Market period matches some particular day. In our case it looks like the most logic explanation since it's week end.

- Market changes direction because supply and demand are changing. This will increase later, Christmas and the expansion release will force prices up on many items.

- A market maker is anticipating analysis (see feigning).

- Deep testing. This is another typical RL market behavior. When confidence erodes (see Euro in these days), bears (aka the sellers) start briskly pushing down, possibly in panic mode. Bulls (buyers) react, the cyan line goes up and suits their mentality after all.
As of now they won a battle, but bears dented the line and feel stronger. If the market sentiment turns to sell mode, bears will assault the line again and in 1 - 3 rejected tries they will drill it at last.


For now the price is safe.



Market sentiment

In this exact moment there is not a simple TA to help decide what to do right now.
So we'll guesstimate.

- Price is supported by week end activity.

- 5 day SMA reversed downwards.

- Cyan line channel got tested hard.

- We are reaching a maximum of price that "looks like" an head.

- We are reaching a top of a triangle formed by the cyan and purple line, which often means a trend slope change is next.


All these factors hint at a possible bearish market sentiment, possibly after the week end. Important notice: "local" sentiment does not have to have any connection with the overall long term sentiment.
I.e. the next N days could be bearish but could be just an adjustment in a bullish scenario where Robotics could go up to a new higher value.


Possible scenarios

What could happen next?

It's impossible to say for sure, there's no particular slopes or signals beyond a week end rebound. But an range of elements can be found and analyzed indeed.

There are several important elements: the 55k RN and the 50k BRN that are acting as temporary horizontal channel (tested on Nov 21 and 24), the red descending 5 SMA that could define a further ceiling of a floor delimited by the cyan channel (currently acting as weak support). Price is therefore being "squeezed" in a smaller and smaller space till it'll break out.
If price will try go up it'll have to fight against the 55k RN, a task made harder by the previous ceiling defined by the Nov 21 and 22 maximums.
If price will go down it'll meet the purple trend line that will try support it. If it'll fail, there will be the 20 SMA to act as strong, "last resort" support.
If even the 20 SMA will fail keeping up price, there will be an hard crash (unlikely scenario as of now).

If I had money into Robotics I'd slowly start freeing positions right now for a total of 50% by Monday. Then it'd be time to babysit and look at what happens, if price starts tanking below cyan and expecially below the 50k BRN, then it'd be quick sale. Given 1B in Robotics, selling half of it at maximum skills would cost about below 4M, a cost worth avoiding risk imho.

Others might prefer waiting for a proper pull back and > 20 slope before dumping their stock. This is where TA ends and discretionality begins.

Taince Milano
Posted - 2010.11.26 23:49:00 - [212]
 

Certainly quite a lot in this thread. The gist of it appears to be summed as:

- the price is likely to hold if it doesnt go up or down
- sometimes it can go down for a number of reasons, and it will continue to if it doesnt hold or go up
- if it goes up, it will continue to go up should it not fall or hold

Futhermore there are a number of identifiable patterns to it. Enough to cover every permutation - head and shoulders, just one bump, teacup, squiggles, zigzags, inverse rectangular triangles with folding corners on downward trends trending upwards...

In any case, if you know enough patterns, every part of every graph can probably be fit to one of them if you scale it.

This way, whenever you arent sure where the price is going to go (and lets face it, this doesnt happen very often at all), you just wait because the data will indicate something is about to occur.

With a couple weeks waiting under your belt, you can correctly identify a couple patterns, trends and buzzwords. You begin to feel you should have spotted this and made money.

So you look at the current situation, but hmm... is this just the slump between a head and shoulders, or that other pattern which would leave you screwed?

Your TA skills help you realise that at this juncture, the price could very well go up if it doesnt hold or go down. Similarly you feel that if it holds, it wont be for long because its likely to go up or down. Luckily a few buzzwords indicate its actually going down, if it doesnt hold out for a bit or go break out into one of them inverse situations where it goes up...

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.27 00:33:00 - [213]
 

Originally by: Taince Milano
Certainly quite a lot in this thread. The gist of it appears to be summed as:

- the price is likely to hold if it doesnt go up or down
- sometimes it can go down for a number of reasons, and it will continue to if it doesnt hold or go up
- if it goes up, it will continue to go up should it not fall or hold



As I posted before, this stuff won't predict the future (what a delusion, eh?) but how to face with the various possibilities and why some of those possibilities could have higher statistical relevance than others.

For those in search of the magic 8 ball, I suggest to contact Mattel or one of their authorized resellers.

Taince Milano
Posted - 2010.11.27 01:19:00 - [214]
 

Originally by: Vaerah Vahrokha
For those in search of the magic 8 ball, I suggest to contact Mattel or one of their authorized resellers.


The thing is with historical data alone, even finding patterns in it, is of little interest unless that can be applied to the present to predict the future.

You didnt overtly say it, but I felt like you were putting forward a perfectionist argument in which people are wanting 100% predictability.

It would be nice. Nobody needs it though, and I doubt anyone expects it. All people are wanting, and the reason they are reading this thread, is the hope of having some statistical advantage which would allow more wins than losses so to speak.

Your posts indicate that TA suggests places to buy, places to hold and things to watch out for so you know when to sell. Preparedness. This is attempting to predict the future.

To say that it will arm a person with information from technical analysis of market patterns to identify breaking points so they know to sell or get out is to attempt to predict the future.

Anyway if many traders get on board and use this technique, it will work. Should enough people do it, traders with similar expectations will put pressure on the product to conform to their view of the market. If everyone does, it becomes self-defeating and people arent making any money.



Caldariftw123
Posted - 2010.11.27 03:26:00 - [215]
 

Hey VV :) You've obviously put a lot of work into this, and you've been very careful to teach the skillset rather than get tied into specific predictions. I think you've done a great job and really appreciate it.

TA is a very useful tool for the markets, I have been 'into it' for a while now, and it's very very interesting to me to see someone try map it out on to the EVE economy.

Obviously there are flaws because the economy has to deal with "the minerals I mine are free!" mentalities and Akita T and his cheeky "I think I'll sell 1million tech today just to see what happens" stuff ;) which would not really happen so much in real life (the money you have is certainly not free for most people and you bloody well work for it if you are like 99.999% of people on this planet) but like I said you've been very careful not to make actual predictions. It's just yet another tool in a traders toolset, a useful one, and used well it can improve the odds of winning over losing. Thanks a lot for this thread.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.27 13:40:00 - [216]
 

Edited by: Vaerah Vahrokha on 27/11/2010 13:43:07
Quote:

The thing is with historical data alone, even finding patterns in it, is of little interest unless that can be applied to the present to predict the future.



Well, as stated in the first post, the original intent was to find similarities between RL and EvE economy and possibly exploit them.

Most of all, you'll probably have noticed how the thread name starts with "Experiment #01".

In the middle of the OP, this is explained as:

Originally by: Vaerah Vahrokha

The first phase would be about finding possible patterns of similarity between a RL market price action and EvE's.



that is, this is the first phase of something (= finding similarities), it's not a whole "trading system".

Now, my ever shorter free time and not being paid at my RL job (company is in trouble) might force me to quit EvE or to shorten this project I have in my head.
Therefore I introduced some elements beyond the OP, but they are not meant to be all encompassing or anything.

Quote:

Your posts indicate that TA suggests places to buy, places to hold and things to watch out for so you know when to sell. Preparedness. This is attempting to predict the future



What's "future"? Raw23 could probably help better than I here.
I'll stick to the big difference between my little take on "future" and "TA prediction" instead.

Future is what's going to happen to a specific reality (possibly out of infinite realities, universes...). It's a vectorial sum of all the micro-interactions happening between the reality components. I don't believe matter etc. actually exist, we could be as well living since billions of *our* years inside a CERN-alike experiment, a pico-second vibration of a singularity or who knows what else.

TA prediction, instead is much humbler. It assumes human mind tend to learn, rationalize, decompose its perceived reality in easily digestible patterns that seem to best solve a specific domain. The more these patterns seem to reliably solve such domain and possibly some variations of it, the more they become part of the mindset.
TA studies a stockastically large amount of human beings for common behavioral fear-greed reaction patterns and tries to use the results to achieve a "beyond coing toss" probability to predict their reactions.
A succesful RL trader is one who manages to get multiple edges over a pure coin toss of a random amount of money:

- Greater than 50% probability of guessing the next market moves

- A trading plan

- A business plan

- Risk management plan

I mentioned most of those but the thread is really mostly about the first.

How much greater than 50% probability of guessing you may achieve, is due to many factors but experience and not panicking are the top two.

The thread is a talk-style (ie not book style) way of showing some of the common patterns and practices thru a series of examples.


Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.27 13:44:00 - [217]
 

Edited by: Vaerah Vahrokha on 27/11/2010 13:47:14
Quote:

Obviously there are flaws because the economy has to deal with "the minerals I mine are free!"



I beg to disagree here. There's more "the minerals I mine are free!" people in RL than in EvE.
It's just less obvious. Out of hundreds examples, here's a nasty one: everytime you go in bank and deposit money you are doing that.
It's doing little to nothing to you and sometimes taxes / fees even erode your capital to negative growth (happens in Europe).
At the same time others are using you (like they do in EvE) and basically your labor in order to re-invest part of your capital into lucrative activities.
YOU worked your wage, YOU will get 1% interest a year if you are lucky, THEY are using part of YOUR labor making multiple of that 1% A MONTH on your face.

And the fun thing is how you'll be HAPPY to be used like that, because that bank offered you 1.35% a year instead of competitor's 1.3%. Your minerals were really better invested here!

Notice how it's not random at ALL that economy and profitability are not teached since graduate school. We are meant to be manouverable muppets.


Quote:

Akita T and his cheeky "I think I'll sell 1million tech today just to see what happens"



This happens in RL all the time. Market makers put down millions in buy orders to rise the market and drive the small fries to follow and buy. Then they dump their stuff, cancel the orders and the market tanks hard (bull trap). Then they setup next orders at low price to farm money off the now panicking small fries.
Pump and dump is not just an EvE term, at all.


Quote:

It's just yet another tool in a traders toolset, a useful one, and used well it can improve the odds of winning over losing



I am extremely pleased seeing you have exactly got the spirit and scope of this whole thread.

Caldariftw123
Posted - 2010.11.27 14:21:00 - [218]
 

Edited by: Caldariftw123 on 27/11/2010 14:43:56
Originally by: Vaerah Vahrokha
Edited by: Vaerah Vahrokha on 27/11/2010 13:47:14
Quote:

Obviously there are flaws because the economy has to deal with "the minerals I mine are free!"



I beg to disagree here. There's more "the minerals I mine are free!" people in RL than in EvE.
It's just less obvious. Out of hundreds examples, here's a nasty one: everytime you go in bank and deposit money you are doing that.
It's doing little to nothing to you and sometimes taxes / fees even erode your capital to negative growth (happens in Europe).
At the same time others are using you (like they do in EvE) and basically your labor in order to re-invest part of your capital into lucrative activities.
YOU worked your wage, YOU will get 1% interest a year if you are lucky, THEY are using part of YOUR labor making multiple of that 1% A MONTH on your face.

And the fun thing is how you'll be HAPPY to be used like that, because that bank offered you 1.35% a year instead of competitor's 1.3%. Your minerals were really better invested here!

Notice how it's not random at ALL that economy and profitability are not teached since graduate school. We are meant to be manouverable muppets.


Quote:

Akita T and his cheeky "I think I'll sell 1million tech today just to see what happens"



This happens in RL all the time. Market makers put down millions in buy orders to rise the market and drive the small fries to follow and buy. Then they dump their stuff, cancel the orders and the market tanks hard (bull trap). Then they setup next orders at low price to farm money off the now panicking small fries.
Pump and dump is not just an EvE term, at all.


Quote:

It's just yet another tool in a traders toolset, a useful one, and used well it can improve the odds of winning over losing



I am extremely pleased seeing you have exactly got the spirit and scope of this whole thread.



Interesting, I never really thought of the examples I gave in the terms you put it. It does make sense. I think, to an extent, EVE has it slightly worse in that someone will quite willing sell a 1million isk item for 1000isk just dumping them from their mission hub instead of hauling to market .. however this probably does happen IRL also, and a lot more than I obviously realise.

Whilst I did think EVE had it worse, I was also pretty sure that TA would still hold up. There are enough people in the main market sectors for the factors that make TA useful in RL finance also to crop up in EVE.

I looked back at your analysis of things like Robotics and Technetium, and it actually helped me make some good profits by using my own analysis of the graphics to judge buy and sell points. edit: oh just to clarify, I know you weren't making actual predictions that people should trade on specifically with those items, I was just giving it as an example of how it opened my eyes to looking at the graphs differently, using outside knowledge I had in the game economy, and went on to make profits off of it! :)

p.s Thanks btw for that VAST forum thread you liked for forexfactory. Good lord I've never seen such a large thread before lol I'm going to enjoy it for the next X months it takes to read.

Taince Milano
Posted - 2010.11.28 09:35:00 - [219]
 


Originally by: Vaerah Vahrokha
Well, as stated in the first post, the original intent was to find similarities between RL and EvE economy and possibly exploit them.



Well much like the plethora of TA patterns to match all situations, you did say a lot of stuff throughout your posts.

There were ones where you were covering up graphs to show how the indicators suggest various expected behaviours, conclusions were drawn and then the rest was uncovered to see how the prediction worked out.

It seems you are strongly encouraging using this technique to predict (as indeed it is what people do with it - study the past to see if any patterns emerge which we can extrapolate). You are also wanting to distance yourself from being too close to extrapolating into the future.

Talking semantics on the term 'future' is side-tracking things. But yeah I can see why you dont like the term. It sounds way too direct. Too measurable. But in the end it has to be. We measure it because it tells us whether a technique which attempts to extrapolate into the future is achieving better results than a cointoss.

If it does not, it has little value when one is trading and wanting to know the answers to "Should I buy?" and "Should I sell?"

THIS is what people are keen to end up on. People want to see it in action. They want to use it on current markets to make some isks. What I am suggesting is that a certain paralysis sets in because there are patterns to describe so much that its a frustrating game of having TA suggest the price can go all over the show, and after the future comes to be, it clearly fits some pattern.

It always does clearly fit some pattern in hind sight. If you have enough of them.

BUT this thread has been quite interesting for me. A hobby of mine is implementing AI constructs. Right now I have a GA library which was previously just using simulated ants as a test bed.

Ive reappropriated it for EVE, and plugged in EVE metrics historic data. I dont expect it to come up with anything. However there are a lot of concepts in this thread which I am incorporating to see what it does with them. BRNs, knowing which day falls on various dates, when holiday periods are, giving it access to the slope of a trend line...

Cool stuff. Maybe one day I'll blog about it. Its like TA stuff, but having the computer find the patterns in historic data.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.28 20:42:00 - [220]
 

Quote:

If it does not, it has little value when one is trading and wanting to know the answers to "Should I buy?" and "Should I sell?"

THIS is what people are keen to end up on



This is what also happens for audits: excess of willful thinking. People project their desire for certainty on things and they should not.
This is also a testament at how modern fake-culture of making people a bunch of everything-believers is working quite nicely, in fact people do lower their critic barriers as they are being teached to, since young.

A great sum of practical knowledge about how and why people want to believe in things and how they will act irrationally in trading, please read this very interesting article


Anyway, this is not the place to discuss about the validity of TA, nor I think so much of myself to be an "authority". I am just "porting" its basic concepts in a format that can be understood by spaceship gamers.

Mass psychological effects have been studied since 2 centuries ago, some got formalized by Behavioral economics and finance

Said that, I don't think it's useful to keep getting off the topic and I'll consider the disgression closed.

Winston Clarke
Posted - 2010.11.29 03:33:00 - [221]
 

Can anyone of you market geniuses tell me whats happening to the Platinum market? seems like its spiked.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.29 15:57:00 - [222]
 

Edited by: Vaerah Vahrokha on 29/11/2010 16:00:38
Platinum

A reader above asked for an opinion about Platinum.

At the moment there are no TA signals about buying or selling.

Now, some will immediately think: "see, again with the elusive answers".

The answer is quite immediate: when people ask on a forum is because they (and the market, by extension) have no idea about what's next.
There comes the outlier that is pushed to stand off the crowd and directly ask what's going on.
If the market itself has no clue, the signals it sends are ambiguous.
In RL it's the same of course. When gold shows a signal of slowing down, people start to ask around why and shortly after there are TV news talking about it.

To further complicate the matter, I have never followed some of these markets, therefore fundamental analysis would not help at all here.


Duh, nothing to say?

There's a lot to say though, just take it with a grain of salt because I have to venture on unknown (to me) territories.
Price talks about its past, it helps building confidence about how a certain market behaves and eventually how to open positions in it without getting caught in the worst situation.


The past

Looking at a yearly graph it's possible to see that many items tend to exhibit cycles. Sometimes the graph seems "circular", i.e. current day's price and trend seems to fit in with the same price of the previous year.
Now, this year has been somewhat of an exception due to the minerals insurance, drops and T2 minerals changes.

Since Platinum would have been less hit by the many changes than others, we'll still try infer some possible similarities with the last year.

Let's start with the basic yearly graph: Picture linkage

It's possible to see that today's price indeed seem to fit with the last year's at the same day. A year ago price was on the rise, in a clear move to form an head and shoulders. This is quite expected since that is a period when many more people play EvE, due to the expansions being released around that period and to the Christmas vacations.


The present

This year things are different in many ways, due to the game changes listed above, to the worldwide crysis (= less money to spend on subscriptions) and to the expansion being "light". Despite these diluting factors we'll still have Christmas vacations and the light expansion is still an expansion so we'll still see *some* price rise.
Therefore a simple guesstimate off the factors above would be that price will rise for Platinum as well.

Before you scramble to buy, there are reasons why I said there are no clear signals.
Price is about to enter an huge FTA (for trouble area), a "cloud" of possible prices.

Picture linkage

TA practices teach that's a bad idea to buy at a FTA, price will move erratically and will need more babysitting.

Possible main price levels that Platinum will reach are shown in the next picture:

Picture linkage

The source of those price levels is connected with dotted lines going in the past. There are other levels as well, since it's a FTA after all.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.29 16:04:00 - [223]
 

The future

The main reason for the current lack of signals is shown in the following graph:

Picture linkage

Price is currently forming a triangle (cyan), a sign of uncertainty but also of accumulation. Triangles "compress" price within smaller and smaller room till it accumulates momentum and explodes upwards or downwards.
Please see the former articles for more information about triangles.

Only after the triangle "pops" it's possible to see where the market is going next.
Two possible paths have been drawn: a red one that goes up and a blue one that goes down. Since the triangle axis is horizontal both could happen, and this is why there's a lack of signals.

This is partly a no problem though, because buying now is late. Clear buy signals were at retracements happened at Oct 31 and Nov 17-18.
The next buy signal would be when price hits the lower triangle side and bounches up to above its previous day maximum.

If you bought at the Nov 17-18 signal you are at 50% odds though, I'd have sold at Nov 24 as price failed to make an higher high. Now it's just luck.

As a rule of thumb you are meant to ride profits and dump the losses fast. This is even truer in some RL markets like futures and Forex, where holding stuff forever will kill your account.

Would I buy right now? No. As we have seen above, a possible buy signal would be once the triangle has popped and a retracement up is visible.
Even then, the FTA will make sure that stock won't rise immediately in value, other markets with less soon-to-be confusion could be better.

About the "blue" path downwards: it's also possible as of now, it could be a manipulation soon going to pop. No way to know for sure unless you babysit the orders for the next days.

Nicky's Tomb
Posted - 2010.11.30 16:19:00 - [224]
 

Queue, brain dead noob question, but...

When you talk about "Price" are you talking about the average day price, the sell price or the buy price?

I realise for most of the purposes here it probably doesn't matter, but I would assume when you decide to buy up an item you buy with a buy order and not from the sellers?

Then is my second question. If you are buying from buy orders, how can you say you don't need to run the 0.01ISK grinders? As far as I can tell if you buy from buy orders your large order will need constant maintenence and will still possibly take days to complete.


Finally....

How do you fancy having a quick look at Cap Boosters 150. Seems to have suffered several manipulations and is currently under going one now.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.11.30 20:50:00 - [225]
 

Edited by: Vaerah Vahrokha on 30/11/2010 20:51:01
Originally by: Nicky's Tomb
Queue, brain dead noob question, but...

When you talk about "Price" are you talking about the average day price, the sell price or the buy price?

I realise for most of the purposes here it probably doesn't matter, but I would assume when you decide to buy up an item you buy with a buy order and not from the sellers?

Then is my second question. If you are buying from buy orders, how can you say you don't need to run the 0.01ISK grinders? As far as I can tell if you buy from buy orders your large order will need constant maintenence and will still possibly take days to complete.


Finally....

How do you fancy having a quick look at Cap Boosters 150. Seems to have suffered several manipulations and is currently under going one now.


By price I intend the values indicated by the yellow dots. When it makes for a smoother and easier picture I also include the 5 SMA (which when price is smooth it's not a lot different than the yellow dots). If no actual prices were available, I'd pick the value of the sell orders since buy orders for low volume markets are way too spread apart and irregular.

Finally, when discussing about those week+ long price movements, it becomes of little signifiance buying off buy vs sell orders since

(sell - buy) = o(sell' - buy)

which would be a typical buy formula scenario, where

sell = original sell price,
sell' = next considered period / top of head (and shoulders) value / sell price for today
buy = original buy price,
o(X) = Small O notation, the opposite operator of this Big O notation


For example, imagine there's a module like 10MN MWD that sells for 1500k, buy for 1400k and after 3 weeks it goes to 2M with an heads and shoulders (unlikely, but happens).

The typical 0.01 ISK trader will have spent long hours, spent broker fees etc, had to grind Caldary Navy (Jita) standings, train alts with trading skills and high charisma etc. etc.

The swing trader that uses TA will log in 5 minutes, purchase the stuff off sell orders (if he so desires), relist it at 2M and then go pew pew or something fun else.
The latter will still make a decent profit, he could have chosen to sacrifice 100k of spread (1500k - 1400k) to save time and after all he had a complete pain free ride.

Now, if we switch to something not T2 module, maybe a material affected in the latest patch, we'll begin seeing that the latter trading strategy not only is a "pain free" trading but also becomes much more competitive in absolute value with the other guy who has to work hard, for long and the rest I said before.



Finally, about the cap boosters... that item has insignificant volume therefore it was, is and will be manipulated.
Since it was one of the items I traded back in 2009 I can also say more about it: cap boosters are huge therefore they are hard / expensive to move vs their low value and this is why it's easy to manipulate them without prompt arbitrage from other regions.

Nicky's Tomb
Posted - 2010.12.01 10:12:00 - [226]
 

Thanks VV. I suppose if the price is going to rise by 5K then it wouldn't matter (much) about the 500ISK margin between buy and sell, especially as the buy orders take time to fill and have competition.


Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.07 14:43:00 - [227]
 

Update on Robotics

While RL made well sure I could not update the thread as often as I wanted, those following this TA experiment could have made a profit by employing the simplified, zero indicators techniques I shown in the past weeks.


Past

In the last installment we were left at 52k and a bearish market sentiment.

Price looked like this: Picture linkage

Let's see some quotes:

Originally by: Vaerah Vahrokha

All these factors hint at a possible bearish market sentiment, possibly after the week end. Important notice: "local" sentiment does not have to have any connection with the overall long term sentiment.



This revealed to be almost true, in fact it happened but sooner than the week end.
This is a typical error by approximation that happens to technical analysts that don't closely follow a market fundamentals day by day.
In my case as you may see by the dates between updates I have time to glance at stuff once a week. This does not help me learning the specifics of the market, including its velocity.
Knowing this I wrote "possibly" before "after the week end", but still... Apparently the rush at selling on a bearish market beats the "week end effect".
It was in a section properly bolded as "market sentiment" though, so if someone blindly took that as a sell signal instead of just a sentiment it'd be his loss.
He would have lost trader taxes to rebuy back the stock shortly after.


Originally by: Vaerah Vahrokha

I.e. the next N days could be bearish but could be just an adjustment in a bullish scenario where Robotics could go up to a new higher value.



This happened.

Let's see the "proper" section instead:

Originally by: Vaerah Vahrokha

There are several important elements: the 55k RN and the 50k BRN that are acting as temporary horizontal channel (tested on Nov 21 and 24),



This happened, in fact price is still compressed inside and repeatedly testing the 55k RN. It's proving to be hard, as it's expected when a price fights against a resistance that also happens to be the all time maximum.


Originally by: Vaerah Vahrokha

If price will go down it'll meet the purple trend line that will try support it. If it'll fail, there will be the 20 SMA to act as strong, "last resort" support.



Price indeed fell down to meet the trend line which in turn...


Originally by: Vaerah Vahrokha

If I had money into Robotics I'd slowly start freeing positions right now for a total of 50% by Monday. Then it'd be time to babysit and look at what happens, if price starts tanking below cyan and expecially below the 50k BRN, then it'd be quick sale



Price indeed broke the cyan line. At this point, as quoted above, the "slowly start freeing positions right now" would end in "then it'd be quick sale".

Curiously enough Nov 26, the article date, is also the exact day when a sell signal is triggered. As shown several times, the simplified tecnique is about:

1) Have a price "slope" > 20
2a) Buy signal: during an up trend, wait for a retracement down then buy as price returns rising and goes over the previous high. Happens about 1-3 times per uptrend.
2b) Sell signal: during a down trend, wait for a retracement up then sell as price returns falling and goes below the previous low. Happens about 1-2 (rarely 3) times per downtrend.

Let's see this translated into numbers by using the cited example of having 1B in stock and why I talk about "babysit".

(Continued...)

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.07 15:21:00 - [228]
 

Pre-conditions:
In order to sell stock at Nov 26 @52k we had to have bought it at some previous date. In the worst case that fits with the simple tecniques shown in this thread:

- We bought the 1B of stock at the last buy signal (2a) happened at Nov 20 @48k. 1B @48k means 20833 Robotics pieces.
- If we'd sell at 54k (that is once price started dropping from the all time maximum of 54999 we'd realized 20833 * (54k - 48k) = 124,998,000 minus taxes.
- But for some reason, to still have the stock at Nov 26, we did not sell it.


Nov 26, article is out: we still have our 20833 pieces. We read this thread and learn about the sell signal (2b) and about the suggestion of selling if the cyan line breaks and also about the "babysitting".

Now 26, later: price keeps tanking. At 51.5k the line breaks so we decide to dump the whole stock.
The realized profit is Quantity * (Sell - Buy) - Taxes = 20833 * (51.5k - 48k) = 72,915,500 - taxes.

Nov 27 and following: since EvE does not have short selling we have to stay "flat", that is not do anything.

The market was and is as follows: Picture linkage

Nov 30: if and only if you are online a lot (markets babysit grade) you could see a channel break out of the same kind covered in the first pages of this thread.
The break out retraced down (as often happens) below BRN 50k before continuing upwards.
This shows two things:

- This has demonstrated once again how price hates to stay at a BRN (see the range covered by the so called "shadow" - the thin line below the yellow dot);
- the dip below 50k formed a retracement vs the local high at the previous day, in the same day price switched direction and started pushing up again to 51k.
Traders who stay a lot online could see that motion and correctly interpret it as a (2a, previous post) buy signal.

Let's assume to be such a trader and to have bought the usual billion worth of items as price surpassed the local high at 49.5k.
The trader would have 20202 Robotics items.

The days pass...

Dec 07: price is currently busy testing the 55k RN since 4 days ago.

(Continued...)

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.07 16:31:00 - [229]
 

Present

It's possible to see an updated market situation with this other graph: Picture linkage

What does TA say?

- No buy or sell signal, the last was the Nov 30 one.

- Those "in the market" as of today still have those 20202 pieces. "In the market" is a term that indicates those with a position (either buy or sell) currently open.
This translates into an unrealized profit of 20202 * (55k - 49.5k) = 111,111,000 ISK. Unrealized profit is another term that means "potential profit if I sold right now".

- Trends tend to get going till they are forced a reversal. The purple line in the graph above is the trend line. The cyan line is the price channel (dynamic boundary, see previous articles), price ATM is exactly playing in the middle of it.
Advanced traders could go Google and read about Andrew's Pitchfork, a graphic element for these scenarios.

- Price is testing the 55k RN (dotted red line) again and again.
Due to the point above (trends prefer keeping their direction), this will often result in a upwards breakout. More rarely, price may "give up" against a too strong resistance and settle at a lower level.


Future

Price may either break the 55k barrier upwards or bounce below it.
Some of those in the market are dumping stuff (this is why the resistance is so hard to break) as they believe this is the top of the top.
Others bet that Robotics will go further up, expecially because:

- Christmas vacations are next, this is usually an high time for subscriptions and thus demand will increase.

- Next "expansion" is soon, again this causes a rise in players (even just for a while).

- PI could tank in January due to the PI "expansion" making PI easier to gather, therefore they know that market makers will try speculate from now to right before such patch.


While this has nothing to do with TA (therefore I may easily be wrong), I am of the idea that price will still climb.

If I was in the market I'd not sell before a clear reversal in price. A major sign of market crash would come from price breaking the purple trend line downwards.

If I was not in the market I'd wait for price to clearly stick at > 55k. This could be easier said than done though, because with this trend rise it's easy to lose some profit by entering the market at i.e. 57k.
It's risky as well, we are at above the maximum ever reached, volume is low and every day there's a risk for a nuclear explosion sized crash. I'd probably give up (fear > greed) some reward to enter after the next retracement.
Once enough traders switch from greed to fear the crash will happen.


Disclaimer

I want to warn the Readers of the fact that this thread is read by some market makers with several billions at hand (they told me in game).
They might use this thread as a market maker, to try and increase the profits they already achieve.
I am purposedly mostly covering well capitalized markets in order to reduce their effects but don't understimate their powers.
Some of them ARE out to catch the small traders.

ZeJesus
Posted - 2010.12.07 22:07:00 - [230]
 


Anyone seen the snake oil seller? Can't find him... hey! Found it.

Laughing

Kaztor Troy
Minmatar
The Nietzsche Followers
Shades of Gray
Posted - 2010.12.08 03:38:00 - [231]
 

Hello there again, VV!

Posting just to tell you that I've been progressing through the Babypips school, and loving it :)

It gets pretty exciting once it starts combining Fibonacci, pivot line trading, AND candlesticks, and you actually understand when the three point to the same place :)

P.S.: WTB japanese candlesticks and Fibonacci retracements in my EVE!! YARRRR!! I can already imagine these coming in a market expansion: Eve Online - Tycoon YARRRR!!YARRRR!!

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.20 14:39:00 - [232]
 

Edited by: Vaerah Vahrokha on 20/12/2010 14:43:56
Update on Robotics


The past

Today's situation is as follows:

Picture linkage

There's an "odd" trend inversion beginning some days ago. How comes that a scarce commodity would suddenly tank?

The reason is here and is easily explained. These "few days ago" were patch days. Players resubscribed as it often happens in this case, found out they had some pre-PI stashes of robotics around and went for the big sale.
Others probably have mistaken this patch day with the "automated" PI expansion and also dumped their stock in anticipation of automated PI to calm prices down.
Finally, there has been the usual "week end dump", ie people who can only play in the week ends logged on, hauled their 4 days period PI extractors products to Jita and unloaded.
Other guys took the opportunity to buy (Dec 17) and relist robotics instead, played "the gap" and on Dec 19 dumped their cheaply bought stuff on buy orders, causing the market to tank.


The present

Robotics this morning had a large-ish sell order (45k pieces) but as of now, despite being 2pm (i.e. the opposite of prime time) that order has been eroded to 32k already.
Someone tried creating a disturbance order in a off-Jita station and then 0.01 ISK basing on that, but it's failing.
A gut feeling is that price could resume climbing up to 63k and upwards.


The future

All what has been said above has little to do with technical analysis.
Looking at Robotics with a TA approach yields to a more unbiased look, as shown in the following graph:

Picture linkage

As usual, We could see several factors at play:

1) This yellow line is the price ceiling. Since it has been tested twice, it's been playing as resistance and will need to be broken upwards to let the price rise again.
It's perfectly possible that price will go up and bounce off this resistance once or twice more before it gains the momentum to break out. If it fails before the next week end the price could start oscillating in a range.

2) This purple line is the level you could have sold your stuff if you followed this thread's methods and were very cautious. The red arrows show the retracement "trigger" that would cause the sale. Other traders would prefer to wait for more steep slope before selling though.
The former is called "scare money" in RL and is typical with small wallet traders who will flee at the first price bump, the latter are the more fat wallets who also believe to know what's going on or have ways to play as market maker.

3) Is where a trader willing to buy would wait to see price drop to and then reverse before considering a purchase. See point 5.

4) This is the 20 SMA line. If price gets down to that dynamic support line and breaks below it, it's probably an high time to dump the whole stock.

5) In a buy scenario, a trader could wait for price to drop to 3) level or even 4), bounce up to above the previous day(s) low and form a marked slope upwards (> 20). An example of this are the two yellow circular dots anticipating a possible price compatible with this scenario; white arrows show the bouncing up (aka retracement in RL) motion to look after.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.20 16:17:00 - [233]
 

Update on Technetium

Technetium is a fascinating market. It provides for lots of fun and technical analysis concepts.


The past

Today's situation is as follows:

Picture linkage

The picture by itself does not tell a lot. It looks like a standard "was good to speculate on" market with the obligatory heads and shoulders peaking at the end of September 2010 and then calming down.
A closer look with TA in mind, would reveal that price has indeed cooled down but there's something inconspicuously brewing up since a long while.

A better market picture could be the following:

Picture linkage

It's easy to notice how price compressed into a triangle whose sides start as back as mid October.
The lower green side could be actually be considered a prolongation of the 20 SMA dating back to middle of July! This is a massively huge dynamic support we got here.

It's also possible to drill more information by drawing a quite large rectangle around the market FTA (For Trouble Area):

Picture linkage

where prices don't progress in a steady way but meet a "cloud" of resistances and supports making analysis harder for this price range. While in this FTA, price is fluid and hard to analyze.


The present

The concepts shown above snap in place exactly in these days. It's expansion time and heading towards Christmas vacations, aka two big market makers due to increased demand.
As proper TA teaches, a longer time scale frame has been checked earlier (in RL it's usually done on time scales changing by a factor of about 4).
Going more in detail, it's possible to see the triangle tapering right in these days:

Picture linkage

Price triangles cannot keep tapering forever, of course. Price gets to a point where it accumulated too much momentum to be further compressed and literally explodes (breaks out) in a direction that classical TA texts can show. You may search for references, there's a lot to read about TA triangles, well beyond the scope of this thread.

In our case there is a marked outlier going up that of course (!) chose to nestle to the nearest RN, 65k. Looking back to the previous months it's possible to see how that RN is a decently strong resistance since in mid November it would succesfully manage to tame the price growth.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.20 16:33:00 - [234]
 

The future

After breaking the long time formed triangle, price is rising up and hitting the strong resistance at RN 65k.
As shown by the blue arrow at the graph bottom, volume in the last days has been steadily rising despite the visible price rise.
This is a strong bullish signal, yet always recall that emotively trading will exactly get you in the spot the market makers prepared to you: bull trap (or bear trap), where you end up losing big money.

A more analytical approach is given in the next zoomed in price graph:

Picture linkage

Please visit your user settings to re-enable images.

It's possible to see the triangle's edge and how the last price broke out of it.
The cyan arrows show the bullish pull back that started the rush. A trader following this thread's advices could have bought once the price "V" was completed and the second half of the "V" passed the price before its dip.
A more experienced trader would have waited for the strong dynamic resistance (the triangle upper side) to be broken first, since strong resistances can mess the buy / sell signals up a lot.
A more conservative trader would wait for price to climb and break above the strong RN as well.
The above are all trade offs, the trader has to choose more profit (by buying earlier) vs more risk of a false bull signal.

The next days will be important.
The zoomed in picture shows the prominent scenarios we could face:

1) Price steeply rushes up. Despite being a prominent scenario, this could not happen so easily. It's a bit too early for demand explosion and the 65K RN is very strong. If there has been built a lot of momentum this could happen though and triangles price consolidation and compression may have this effect.

2) Price hits the 65K RN resistance and is rejected. It could probably bounce again on the triangle upper side that now became a price dynamic support (check the previous articles about resistances transforming into support once broken).
If demand keeps the current pressure it'll eventually break up and proceed at a nice upwards rate that could last a good while (Google Gann theory).

3) Price fails to break the 65K RN resistance and is forced back in the triangle. The next move is unpredictable but it could lead to a weaker attempt to break up again that will fail and stick to the lower side of the 65K RN and lead to a ranging market. This is a less likely scenario but TA cannot exclude any option.

4) Price is violently rejected by the 65K RN resistance and is not only forced back in the triangle but shortly after it breaks down. This is also a possibility that cannot be discarded. Subjectively speaking, I could see this scenario in the last part of January 2011 but I cannot exclude any market choices.

The "lesson" I am trying to teach here is that market makers anticipate the obvious, "just common sense" market choices. If they manage to out muscle the natural market trend they can indeed setup "obvious" scenarios to trap small traders into their net.
Therefore beware of the smart sharks and always invest what you can afford to lose!

Wyke Mossari
Gallente
Posted - 2010.12.21 15:12:00 - [235]
 


As always excellent analysis, perhaps you might apply your techniques to this T3 market discussion thread.

The question at hand is fundamental shift or market manipulation.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.21 15:40:00 - [236]
 

Originally by: Wyke Mossari

As always excellent analysis, perhaps you might apply your techniques to this T3 market discussion thread.

The question at hand is fundamental shift or market manipulation.



I currently don't have time to analyze T3 market in depth, I actually never bothered with T3 at all. But I can give you food for thought:

1) Price jumps up for nanoribbons and tengus at the same time, with no delay.
2) Volume has a a wild variation in a period of days and not a gradual rising slope over weeks
3) Tengu: check what TA figure you can see by looking at what happened at Dec 10. Ribbons: check the same.
4) Price curve slope is much steeper than Gann theory allows for sustained growth
5) Very long "candles"
6) Yes, it's probably too late.

Lederstrumpf
Posted - 2010.12.22 09:49:00 - [237]
 

Edited by: Lederstrumpf on 23/05/2011 02:06:16
-

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.22 11:16:00 - [238]
 

Quote:

Are you a Mechanical Parts (/Robotics) market maker?



This is not going to be easy to reply.

While I am academically fascinated with economics, I am not into ISK making (!) because:

1) I don't believe in richness as a way to make me happy (I know it helps)

2) I don't believe in becoming e-rich, in Monopoly(tm) play money wealth nor I feel good at being good at making it.

3) ISK is a terrible currency, any economist worth his salt would convert even the lowliest LABOUR RL cash into ISK in order not to perform LABOUR in a GAME for a fraction of the reward.


The above also explains why I wrote this thread.

Now, the situation might change in the future - and once again for no EvE related matters.

Despite the above ATM I am involved in two ways:

1) I am invested in a field whose profitability is tangentially conditioned by Robotics.

2) I have become a market maker of sorts. I had to stop giving "THE" answers very fast. Despite the inconspicuous appearance (the counter of thread views is the telltale sign) this thread has an hefty following.
I have received eve-mails with thanks, congrats, donations up to 250M but also mails telling me how they made money counter-playing the patterns I wrote about.

A guy is being so precise that I put a "trap" in one of the last days posts (swapping pattern behavior probability) and he promptly fell into it and right now he is manipulating the market in the way I thought he'd do.


So, does the above blurb count as a yes or a no to your question?

I hereby gave you all the elements to draw your conclusions.


Quote:

Do you know/assume the Mechanical Parts price to be a manipulation caused bubble, rather than a high caused by real demand?



I have not checked Mechanical Parts due to the reasons above: if I wanted to grind ISK of course I'd follow the Robotics supply chain, but I don't, so I just look at the graphs people tell me to watch.
If you want I can check them.

One thing I can tell for sure in advance is that EvE markets are:

- always oversaturated by idiots dumping underpriced stuff (what I slave grind and labor for, is free!)

- almost all of EvE markets are illiquid and thus easily manipulated.


Therefore if you see sudden bumps they are all manipulations. Real supply and demand variations have a way milder slope, it takes a patch with large consequences to provoke a more sudden change.
The heads and shoulders are NOT a supply and demand change, they are ALL speculation and / or manipulation, it's why I point them out so often.

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2010.12.22 16:02:00 - [239]
 

I called this analysis misplaced before and I will again. If you want to understand what's driving the tech markets, you need to analyze what is actually going on in the tech markets. TA is fine for identifying the ever-present psychological trends involved in a moving price, not an actual determinant of the major price movements.

Approximately 60 tech moons have been taken from core holding alliances MM and ME by PL. The first impact of this is a drop in long term plat tech supply, as PL were not reacting directly like MM and ME were. The second impact, which is the second shoulder of you "head and shoulders", was due to MM and ME driving down the market price in an attempt to make the tech moons less desirable compared to potential contract money PL could hypothetically be offered. This push included tech and plat tech. At this very moment you are seeing the results of that tightening of plat tech supply and the end of the crash efforts as the plat tech price moves strongly up. You will then see a medium boost in technetium itself as people buy it to react as the profitability of reacting plat tech rises significantly. Most likely this upward movement will, as always, be exaggerated by speculators, resulting in another small peak and, once again, a higher long term stable price below that peak.

Using TA on technetium is like using TA on oil. It has to be applied as an after-note to the very real and apparent forces at play.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.12.22 21:45:00 - [240]
 

Originally by: SetrakDark

If you want to understand what's driving the tech markets, you need to analyze what is actually going on in the tech markets



I don't want to understand at such length. If I wanted I'd use fundamental analysis, spend the required time (which I don't have) following it and so on.


Originally by: SetrakDark

The second impact, which is the second shoulder of you "head and shoulders", was due to MM and ME driving down the market price in an attempt to make the tech moons less desirable compared to potential contract money PL could hypothetically be offered.



See, you know all sort of tidbits which is indeed the best and optimal path to profitability (as stated several times in other thread posts).

In TA instead, the analyst does not care about who, how, why, how much caused X or Y. This is a weakness (lack of precision, possible to decide wrong) that is the downside at not having to keep up with the long story behind every of the thousands of markets in EvE.


Originally by: SetrakDark

Using TA on technetium is like using TA on oil. It has to be applied as an after-note to the very real and apparent forces at play



TA IS an after note. Even if it did not have predictive value at all, it'd be a fascinating aspect of the study of human psychology and the topic of this thread is to find similar price behaviors, not to predict them or to introduce anything "exceptional" or "new". Some simplified techniques were shown to spice up the whole stuff, trading techniques are not TA.

On the other side, "predictive value" is a misinterpretation. It's more about finding recurring patterns, given by the natural human tendency at repeating previous behaviors and by the ever present inertia.
The former hints at possible psychological stops, thresolds, jumps etc, the latter helps at giving a speculator time to enter the market while the inertia keeps a situation steady.
The typical case, aka "the trend is your friend" is exactly based on this.


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