Header Art by Redline XIII
The months proceeding my transition into a Regional Arbitrage Trader saw my profits soar and my time spent at the market plummet. My success was consistent sustainable, fending off traders-bane: Burnout.
My diversification strategy worked perfectly, I didn’t win every order, but I won enough. This diversification resulted in hundreds of orders to update but didn’t require me to always be on top. It can lead to burnout and force you to be a slave to the market, which is what led me to what I call the Rundown.
Even with pruning my Quickbar to find the most worthwhile markets to get into, there were too many to dedicate minutes evaluating each one. I could only dedicate a second to each of my hundreds of items. Trading is a gamble, an educated bet, I had come to realize. Understanding that I had no control over the whims of the market after I had purchased an item enabled me to make many good bets instead of a few great ones.
The important information that you have seconds to consider is:
- Low Price
- High Price
That’s it. It’s up to the invisible hand of the market after that.
Once a week I spend 30 minutes shopping for items, expending my trade budget. I use up 75-90% of my available Buy Orders and place my bets.
I run through my Quickbar, evaluating those three metrics, and either decide to gamble or not. I check the Price History tab and if the current Buy Order price is at the low end of the spectrum for the previous week, the Sell Order price is not at the top end of its spectrum for the previous week, and the Volume higher than X for the week, I’ll place my bet.
I use a week time frame because it is the most relevant for my evaluation. I disregard the multiple speculations and economics of why an item is the current price it is. I only care about where that item currently is on the time frame for the past week. Item prices fluctuate, and we, via this method of trading, don’t care why.
Buy Order: The relevant information is I don’t want to get in on an item at the top end of its Buy Order price for the past week. Reason – I’m not concerned with buying an item for the lowest price possible, but rather concerned that I’m not buying an item at the top end of its spectrum for the past week. Getting into an item lower than the top of its spectrum shows me that my buy price is lower than the price that that item is capable of.
Sell Order: The relevant information is I don’t want to get in on an item at the top end of its Sell Order price for the past week. Reason – I’m not concerned with selling an item for the highest price possible, but rather concern that I’m not evaluating my profitability of an item that is currently at the top end of its spectrum for the past week. Projecting the profitability of an item lower than the top end of its spectrum shows me that my sell price is lower than the price that that item is capable of.
Volume: X is few things. When I had limited funds to trade with, I was able to only deal with high volume items. As my trade fund has grown I find myself forced to get into lower volume items. But a baseline volume is necessary. I want to flip items, not sit on them and update them multiple times before they sell. A good baseline for Volume is at least 30 a day. That number gives your orders many opportunities to be fulfilled.
Once or twice a day I spend 15 minutes updating my Buy and Sell orders. Even less consideration for economics and speculation is used for this process.
I run through my Buy Orders, and the only evaluation that comes into play is large increase in price from the initial placement of the order, or the last time I updated the order. If the increase is small in consideration to the total price of an item, it gets updated without a second glance. My only pause is in the event there is a large increase on an item. In that case, I will do another Rundown on it, and proceed from there. Either keeping my bet or getting out.
I run through my Sell Orders, and the only evaluation that comes into play is a large decrease in the price from the initial placement of the order, or the last time I updated the order. If the increase is small in consideration to the total price of an item, it gets updated without a second glance. My only pause is in the event there is a large decrease on an item. In that case, I will check the daily Volume of that item, and if the current stock of Sell Orders that are lower then mine are fewer than a days’ worth of sales, I’ll hold my price. If the current stock of Sell Orders is greater than a days’ worth of sales, I’ll undercut to the top.
I update my Buy and Sell orders before my weekly shopping, and the only evaluation that comes into play before I place a new Buy Order is my current stock of said item. If I hold more than the daily volume of that item, I don’t place a new Buy Order. If I hold less than the daily volume of that item, I place a new Buy Order, with consideration of my baseline X Volume.
The Rundown is the most important part of my trade strategy. I could evaluate any one item for 5-10 minutes and have more information to make a better trade decision. But that would either limit my scale or take up much more time. I reduced each trade to the most important decision, anything beyond that has severe diminishing returns.
As previously mentioned my method isn’t the most ISK/Hour, but it enables a huge fun per hour so I don’t burn myself out and quit the game. I can spend 30 minutes dedicated to making ISK, even if it is looking at the boring trade window. I don’t allow myself any more than 30 minutes a sitting, or more than two updates a day. I make more ISK than I’ll ever be able to spend with these time constraints, there is no reason to dedicate more time.
I’ve found in my space profession, and it lets me experience and enjoy Eve.
Boring Story BroNovember 16, 2019 at 11:52 PM
when is part 5 due?January 6, 2020 at 12:54 PM
to me it was an interesting read 🙂
Rhivre Super Duper
Part 5 is in the works. So hopefully not too long before you get to read it 🙂January 6, 2020 at 6:56 PM
antronics Super Duper
I’m glad you enjoyed it, part 5 on the way!January 6, 2020 at 7:20 PM
Art Vandolay Super Duper
Glad you liked it! Part 5 is in the works now.January 6, 2020 at 11:37 PM