How to read the in game EvE market charts - Page 4 of 7

Identifying trends

Knowing when a market is trending and when it is ranging helps with trading. Traders want to trade in the same direction of the trend and never counter-trend (an old trader motto says: “the trend is your friend”). It is also possible to profitably trade inside RMs but it’s harder, expecially because in EvE it’s impossible to short sell. Therefore once identified a RM, it’s necessary to buy when price hits its bottom and sell when it hits its top.

Which elements make it possible to say “this is a RM” and which others “this is a trend”?

As said above, price moves in a zig zag motion, each zig zag is called “swing”. The placement of the next zig zags determines whether we are in a trend or RM. A zig zag looking like a nice ladder with ascending or descending swings is a trend. A random zig zag with same level or random swings is a RM.

The following picture shows a descending trend or downtrend:

~1~

The blue segments are the price swinging down, the “HL” and “LL” labels mark the swings tops and bottoms. In particular, a donwtrend is identified by an orderly sequence of Higher Lows (HL) followed by Lower Lows (LL), like descending a ladder. The red dotted lines and arrows show the zig zags.

The next picture shows an ascending trend or uptrend:

This is exactly the most profitable setup in EvE Online. This time the blue segment (swings) climbs up forming Higher Lows (HL) and then Higher Highs (HH) like a climbing ladder. The zig zags show the same behavior. Uptrends are fairly rare and often caused by new patches altering the demand / supply equilibrium towards the demand side.

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Definitioner

1 (OHLC)

Open, High, Low, Close (and sometimes Volume) data, is a finance industry standards format used to represent price evolution during a certain period of time (daily, weekly, hourly...). OHLC data are consumed by financial analysis applications and by charting software to represent price action.

1 (audit)

The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product.

1 (Meta game)

Meta gaming is a broad term usually used to define any strategy, action or method used in a game which transcends a prescribed ruleset, uses external factors to affect the game, or goes beyond the supposed limits or environment set by the game. Another definition refers to the game universe outside of the game itself.

1 (emergent)

Emergent gameplay refers to complex situations in video games, board games, or table top role-playing games that emerge from the interaction of relatively simple game mechanics.

1 (sandbox)

A sandbox game is a type of video game design where a player can roam freely through a virtual world and is given considerable freedom in choosing how or when to approach objectives. Sandbox emphasises a paradigm where, as in a physical sandbox, the user is entertained by his ability to do as they wish creatively and with there being "no right way" of playing the game

1 (discretionary)

A discretionary method is a trading method where little or no mechanical tools and procedures are used to decide the trades. A discretionary trader applies a solid ruleset basing on a flexible interpretation of the market

1 (PLEX)

A Pilot License Extension (PLEX) is an item that adds 30 days of game time to an EvE Online account. It is freely traded like any other in game item. CCP accepts to convert in game PLEXES to real money in case disasters and emergencies happen.

1 (NEISIN)

A New Eden Interstellar Securities Identification Number (NEISIN) uniquely identifies a security. While its structure is identical and strictly compliant with "real life" ISINs, NEISINs are tailored to New Eden investments and contracts.

Identifying trends

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