Eve Knowledge Applied to the Real Stock Market

A Personal History

I know a lot of people still read this site, and I figure I would post a little bit of an update as to what I've been up to in the past few years.  Well, it turns out that the two to three years I spent trading in EVE-Online actually taught me a LOT about the dynamics of markets, supply and demand, support and resistance, etc.  If only there was a way to transfer what I learned in-game to something productive and useful in the real world.

I cut back on my Eve-Online time severely. I got a boring midnight security job (yay for being underemployed!) with a lot of free time, and I started studying and saving cash.  I did everything I could to raise as much capital as I could.  I mean EVERYTHING.  I worked all the overtime available, used coupons, and basically penny pinched.  I even started doing stuff on a stupid site called SwagBucks, well I can't really call it stupid.  I made 500 bucks on the site over the course of a year just using their search engine, watching videos (well letting the videos run in the background), and various other stuff that wouldn't drive me nuts.  Its sorta tedious.

I also spent the next year studying the stock market, every day, till I got a good understanding of what all the technical indicators meant like SMA, EMA, MACD, Slow and Fast Stochastic.  Once I got a good understanding, I started trading.  I really should have started paper trading, but it's lacking that emotional element that you must get used to when you have real money on the line.

I lost some money, not big, but I could see that my method wasn't working.  The stock market just seemed completely different then the Eve-Online Market Place, but I was determined.  As completely different and complicated the Stock Market was, there was just this aura of familiarity.  I couldn't really put my finger on it, but I went back to the basics.

The problem I had with all these technical indicators was that they are all LAGGING.  They move AFTER the stock has already moved.  They look great and amazing when you are studying though! 

Applying Eve-Learned Knowledge

I was a pretty damn successful trader in Eve-Online, but I just couldn't really get it all to click together.  That was until I watched a stupid Youtube video some idiot posted about how Market Makers manipulate the price of stocks.  I started thinking, that's so stupid the stock market is not just one great big manipulation attempt, but then I realized that's exactly what I did in Eve-Online in certain situations.  I have on occasion manipulated the price of items in a region to get more isk per trade! 

It was at this moment that everything just sorta clicked together, not really about the whole manipulation attempts, but instead I realized something.  In EVE-Online, I was the Market Maker! I was the person setting the spreads and profiting simply from the spread.  Only in EVE-Online, the spread per ship was usually a few million to a few hundred million isk depending how expensive the item was, and on the real stock market the spread is literally a penny in most cases.  So I had to remember my old days, when did I change the price on my supply?

I remembered there was usually a decent supply of an item in EVE on the market within a million isk of each other, but every once in a while there was a bit of a lack of supply.  It usually happened when the cluster of supply would be bought out for whatever reason, and then the price would pop up.  This was fairly common, but sorta hard to explain.

Let's do a quick example, let's say that in the Lonetrek Region there was 300 Drakes for sale. They were priced pretty fairly with 10 being up for sale at 25 Mil (the cheap ones out in God knows where), 200 scattered about at 26-27 mil, and 100 scattered around at the 28-29 mil isk range.  Well when the Drakes for sale at the 26-27 million range would run low the price would usually pop up to the higher 28-29 million range before supply would shoot it back down again.  This happens on the stock market as well.

Time To Day Trade

Now comes the tricky part, figuring out the supply and demand of a real stock.  You can try looking at the level 2 and seeing how many shares they have for sale at a specific price.  The problem is market makers lie and manipulate.  If they show a heavy bidder on either side of the bid/ask spread, then it can force the price in the opposite direction.  They usually do a good job masking just how many shares they want or have for sale.

So this is where it gets a bit more difficult.  I knew what I wanted to look for, but I really wasn't sure how to look for it.  I took off all of the indicators, since they are lagging anyways, and focused solely on price action and volume.  It wasn't long before I knew what I was looking for, and it was fairly common! I was looking for a clear resistance line on the chart, the more times that it is tested the better.  As long as the stock has a chance to consolidate before it breaks that resistance line, then it should continue higher at a faster and faster pace until it reaches another source of supply.

It took a bit of trial and error to get this figured out, and it is by no means perfect.  It is not a system because it involves a lot of human interaction and judgement, not some sort of indicator when this line crosses this line and its above the trend line you buy the stock.

The Future and The Results

I've started doing this sort of trading almost every day for the past 3 months (this would be the start of the 4th), and I've had a pretty decent success rate at it.  When I started doing this my first two months weren't too hot.  I was down almost one thousand dollars the first month! The second month I broke even, and in the third I was up two thousand!  In each month I learned to cut my losses early when a stock fails to break out, and I've gotten much better at identifying the patterns.  In each month, I've made more day trades then I did in the month before it.

Well, I want to start up another 30 day challenge sort of blog, like I did with EVE-Online, but this time it will be about the real stock market.  Instead, I will be looking to make it year long thing, or maybe a goal oriented sort of deal.  It would be kinda fun to do a 25,000 to 250,000 challenge, but I haven't decided exactly yet.  I know that I'll probably announce my buys and sells on twitter or something as I make them to prove that it's all legit.  Anyone have any thoughts? Anything anyone would like to see?

Account Safety

Account Safety: It's Your Damn Job

There is no worse feeling then trying to log onto any video game only to find that your account has been hacked, hijacked, banned, or had its password changed by someone else. A lot of things may go flying through your head, and it's tempting to blame everyone else but yourself. The company doesn't have enough security! My account was brute forced! Well, chances are that your account was compromised because you did or didn't do.

It's so easy to overlook account security, and it's usually the last thing on your mind.  The sad thing is that it is so easy to keep all your information safe, including your gaming accounts, email, bank, and anything else that you might use the internet for.  There is no reason why your account for anything should be compromised, just follow this simple little guide.

Keep Your PC Safe

The first step in any plan to protecting yourself from getting hacked would be to make sure that your computer is safe from any viruses, key-loggers, and exploits.  Changing your password would do you no good if the other party can just see what your new password is going to be. This is one of the most common ways that accounts become compromised.  There are a verity of different ways a computer can become compromised:

• Opening .exe email attachments (Obviously)
• Using a old (non-updated) browser with security flaws (all it takes is an ad on a trusted site running an exploit kit)
• Downloading untrusted apps, bots, cheats, key-gens etc that may or may not work but also contain viruses

So what does all this mean? Are you not suppose to use the Internet at all? Well, all you need to do is keep your browser up-to-date, it really doesn't matter which one you use.  I personally prefer FireFox, but as long as your still not using Internet Explorer 6 (and yes people still use it to view this very site), then you are ahead of the curve.  Here's a list of all the things you need:

1. Up-to-date Browser: I personally like FireFox because it self updates, but I'm pretty sure all the rest do as-well.  Just be sure to let them update.
2. Let Windows Update: Windows will automatically download and update security updates, just be sure to have auto-updates on.
3. Keep Adobe, Flash, Etc. Updated: People occasionally find ways to exploit security holes in these programs, but as long as you let them update when they want to then you'll be a lot safer.
4. Anti-Virus: Keep any anti-virus running on your computer like AVG.  Most have a passive scanner that will detect threats as soon as you come across one.

Basically, keep your stuff up-to-date and you won't be getting hacked.

Account Safety: Passwords

Here's where things get a little bit tricky. As annoying as it is you really need to use more then one password.  Let me explain why, if you use one password for everything then it is so easy for someone to basically steal your online identity.  As soon as one log in gets compromised (that contains your email information) then they will have access to your email.  Once they are inside your email, all they have to do is do a bit of reading to see what else they have, including banking information, pay-pal, etc.  Worst of all, if they change your email password then account recovery becomes much harder if you are unable to recover your email account.

This is probably one of the most common ways that hackers can get access to accounts in bulk.  They find exploits, hack, or even bribe the operates of fan-sites/forums and even large guild/clan websites/forums for all the log in information that is stored on the site.  Once they get this information, they just run a script to see how many people use the same password for their emails, and now you have access to everything tied to that email account.

What you need to do to prevent getting completely screwed because one account got compromised:

• E-mail: Separate password that is used for nothing else, I would even use two different emails.  One for high security stuff like banking information, gaming accounts, pay-pal, etc., and one for forums, subscriptions, etc.
• Game Accounts: Separate password for gaming accounts.
• Throw Away Password: There are things everyone signs up for they don't care about, just use a throw away password for these.
• High Security: Just for Pay-Pal, Banking, Etc.

Fake Sites

These are sites that look identical to a real website, or even look like a real company offering you to see a video game for cheaper if you just type in your steam account and password to log in. These are really simple to avoid, just look at the actual web address above to make sure that its the real deal.  If you are say trying to log in on Facebook, and the web address says Ffacebook.com then its obviously fake.  If your shopping and see a site that offers you a huge discount on something then do a simple Google search to see if their legit.

It's not that hard to keep your accounts safe, just use some common sense and stop being lazy using one password for everything.

Eve Online Crucible - Are You Ready To Profit?

The Crucible Expansion is going to bring new ships, modules, and bosses to Eve Online. This is going to be a great time for anyone looking to make a profit. These changes are going to shake things up in the Eve Economy, and those that are quick can make massive profits.  Best of all, there are going to be so many ways to turn a profit anyone can do it.

This includes people who have no prior experience trading.  This expansion is going to be a "dash for the cash" expansion.  The first few industrial pilots that turn out some of the 4 new battleships are going to make a huge profit before everyone catches up.  Explorers are going to get brand new anomalies and DED complexes.  Traders get to trade in all the new things, but there are a few things to watch out for.

Eve Online Crucible: Traders

This patch is going to be bring in a bunch of re-balancing changes to the game.  Specifically, they are re-balancing hybrids, Minmatar Ammo, and POS fuels.  This means that the price of these things may or may not change due to demand.

There are a few things traders need to watch out for with this patch.  T2 rig BPC's and their salvage components are having their drop rates INCREASED.  This will probably cause the price of T2 rigs to crash.  The four new battle ships will also be in free fall during the first few days of their inception, mainly because of the low barrier to entry for industrial pilots.  Robotics consumption on player owned stations is also getting reduced, so watch out for a price change in Robotics.

The POS fuel change is going to be interesting.  POS no longer need to consume a bunch of different things, instead player owned stations will require the use of a new Fuel Block.  Faction towers will no longer receive bonus in reduction of fuel costs, but instead receive larger cargo holds.  Traders should keep a close eye on the price of isotopes over the next few weeks!

Eve Online Crucible: Explorers

This patch is going to show some love to high sec exploration, and those lucky pilots who find the new loot might be able to make a killing.  They are adding new DED complexes rated at 3/10 and 4/10.  This means that they SHOULD be able to spawn in high sec, but who knows if they actually will.  These complexes are going to contain new modules, and like usual the first few are going to go for a fortune.

Since the complexes are only going to be 3/10 and 4/10 the loot may not be super amazing, but their might be a gem or two the new stuff.  Exploration complexes should be spawning a bit faster because they will now despawn once they are completed, and not when the complex is empty.  Explorers also get the added benefit of more T2 rig salvage and BPC's in improved Magnometric Sites.  Overall, this patch is definitely showing some love to exploration.

Eve Online Crucible: Industrial Pilots

Industrial Pilots are getting a tiny bit of love this patch by the implementation of the four brand new Tier three Battlecruisers.  This is likely to have a low barrier to entry, meaning that everyone will be able to jump right into producing these 4 babies:

Caldari Naga

Amarr Oracle

 

 

Minmatar Tornado

Gallente Talos

 

 

 

Eve Online Crucible - Everyone Else

Everyone else is pretty much intended to cover our friends who make Eve-Online the game that it is, the PVPers.  CCP is showing everyone a bit of love by fixing a few of the small annoying things that bug pretty much everyone.  They are reducing the size of metal scraps so they do not clog up your cargo hold, they are making to so anomalies should spawn a bit faster, and they are giving more options for pew pew!

The patch is including a lot of brand new items, and those players who make the dash to get them first are likely going to make a bit more isk.  Anomalies are going to be rebalanced yet again, but this time to increase NPC bounties, not sure how that is going to work out.  Jump bridges no longer require a password to use, so no more typing in the same password over and over again.  Overall, it should be a interesting patch for everyone involved.

4 New Battlecruisers = Patch Day Profits!

I'm sure just about everyone heard that there will be 4 new ships in Eve-Online.  The 4 new battlecruisers are all teir 3 ships, not to be confused with tech 3.  This means that the BPO for these ships should be seeded on the server at npc stations.  These ships appear to be battlecruiser sized ships that sacrifice their tank for battleship sized weapons, which would make sense.  There are already battlecruiser sized ships that can tank level 4 missions, so a class cannon like battlecruiser would make sense.  This is all off topic, though, whatever the ship does it will be new a shiny.  We can profit off new and shiny!

This is all speculation, but we can us the Noctis as a model to make a few educated guesses. We can use this model to predict how things will progress on patch day, other then the fact that CCP probably break the game for a few days.  Heres some of the things we can make educated guesses on:

1. All 4 BPO's will be seeded on the market through their respective factions.
2. They will have relatively short production time.
3. The BPO will be reasonably priced around 3-4 hundred million isk.
4. The skills to fly them are already in the game.
5. They will be made out of regular minerals.

All these factors likely mean that within a few days these ships wil be reasonably priced, because the barrier for entry for these ships is pretty low.  It will be a little more difficult to produce then a drake.  This means that only the hardcore professional industrialists will be able to make those redicious profit margins for making the first few ships.  It should be reasonably priced in just a day or two as the lemmings and small scale industrialists start producing.

The areas that are likely to be lagging behind is going to be null sec.  There might be a bit of profit for those willing to risk the dangers involved in producing these things for their alliance, assuming there is enough interested in trying out a new ship.  It might be possible make a bit of isk selling these ships at null sec trade routes for null sec pilots who want to buy the nearest available one.

Those who feel like gambling can try and buy up a bit of regular minerals like Tritanium, Pyerite, etc.  These new ships, again speculation, are likely to be made up of these, and every producer and their mom is going to try and get in on producing these things.  The hardcore industrialists are likely to have stockpiles of all the required minerals, but the lemmings might create a temporary increase in demand.  This increase in demand will likely be small and short, unless it is paired with any changes that effect mining.  Keep watching those dev blogs!

Isk Watch: The 51 Day Challenge

The 51 Day Challenge is the newest and greatest thing brought to you by the authors of Isk Watch.  The 51 Day Challenge chronicles my attempts at making well over a billion isk in just 51 days with a brand new character with no seed money.  Basically, it is a attempt to show newer players step by step how they can play the game for free.

51 days is the amount of time a new player can receive by having a 21 day free trail and upgrading it to a paid account.  The general rules are set up so I can do anything a new player can, but I cannot use my alts to give myself any advantage.  This includes hauling, seed money, etc.  Everything else is allowed, including mission running and scamming.  Everything I do and trade in will also be revealed on a day by day biases.   Come check it out!

Massive Exploit Ahoy?

CCP just announced that all new paid accounts are going to receive a Cerebral Accelerator implant through the redeeming system.  This implant can be traded on the contract market and is currently valued at around 100 mil isk. This price will most likely not be lasting very long, but it still might be profitable for those who want to hold on to the implant!

It is unclear if CCP realizes this, but currently the buddy program lets players get a free plex or 30 days game time added to their accounts when the invited account upgrades to a paid account. This trick is used by many to create a free 51 day head start on their alt account since they would have to pay for the main one anyways.  The interesting thing is that the announcement specifically says that it includes accounts that update from the buddy program.

Where is all this going?  Well, it is possible to sorta mass create items worth 350 mil isk.  All players need to do is send themselves a buddy invite and create an account. They then plex that account, and receive a free plex or 30 days to their main account.  They can use that new account to claim a Cerebral Accelerator Implant and a Apotheosis.

Players can just forget that account or use it as an alt account once the Cerebral Accelerator Implant and Apotheosis is transferred over.  Once this is all completed you can rinse and repeat, and make as many implants and shuttles as you can send out buddy invites.

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WARNING
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This is untested! I haven't had any sleep yet so this could all be wrong!

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Edit: Received reports that buddy invite accounts no longer receive the implant.
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War on Bots - Update

It is time to review the ongoing war against botting in Eve-Online.  It now has been months since CCP announced their ongoing war, and it would be interesting to see if it was just propaganda to silence the masses. Hopefully, CCP is keeping their word and making it extremely difficult to bot, but we shall see.

Bot 1 Status: Unknown

This bot claims to be working, and they just released a new update.  They claim that it works perfectly with Incarna 1.1, but the site itself looks like terrible.  It does have a forum, but they only have three posts in the public forums since September.  This site cannot be confirmed to be working, and it appears to be a scam.

Bot 2 Status: Working

This bot looks pretty professional, and it has active forums. The site itself looks slick with a lot of information, and there are a few tips on avoiding bans.  This makes it seem like it is possible to get banned for using the bot, but it is not a sure thing.  There are a few posts of people claiming to receive two week bans for using this bot, and others who claim they have no problems yet.  This bot also includes a trading bot...

Bot 3 Status: Working

This bot is a Russian mission running bot, and it appears to be fully functional.  There are a few discussions bugs and settings to make the bot run more efficiently and nothing about avoiding bans. Again, this looks fully functional with little risk of being banned.

Bot 4 Status: Unknown

There is no way to tell if this bot is legit or a scam.  It claims that it is 100% undetectable and working for the Incarna patch.  There is no forums to tell how active this bot is, but it claims to use optical reading and supports up to 3 clients at a time.There is no way to be sure how well it works and if it is actually getting detected.

In Conclusion

It appears that the war on bots is not going any more effective then any other game.  They released one or two small different patches to detect some of the free common bots, and it probably cut down a lot on the casual botting.  It did little to nothing to stop any of the professional botting, but that is sorta to be expected.

CCP managed to kill off the free public bots that were getting out of hand, but the ones that people pay for continued to work.  Maybe, this is because there is a market out for them, and it is just a very lucrative business.  Bot makers simply could have found out what anti-botting measures CCP put in place and circumvented them.  These circumvention measures do not seem to be 100% effect, though, and it is still possible to receive a 2 week ban. The ball is now in CCP's court.  It all depends on CCP releasing an update to their detection measures.

There is a disturbing thing about the war on bots, and that is bot number  3.  The Russian bot is still active.  It is the same Russian bot that was still working in the first War on Bots post, and it seems to be just as active.  This bot is really active with a lot of posts on the forums daily, and it would be nice if they did something to detect this bot.