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Econ 101: Market Manipulation in EVE Online

Updated Mon, Feb 01, 2010 by Ethec

In EVE Online, players can avail themselves of all kinds of ways to make money. While looting, mining, mission-running, contracting, and salvaging are all excellent ways to put some ISK in your wallet, this article is all about trading. You may have heard of "market arbitrage" in EVE, and trading is a little different than this practice. Market arbitrage is technically defined as playing two sub-markets against each other (i.e. buying low in system A, transporting the goods, and selling high in market B). In EVE Online, this practice can result in enormous profits, but if your trade routes take you through low or null security space (or if you come across the wrong crowd even in high security space) you risk losing your cargo in the process.

So trading, at least for the purposes of this article, is simply buying and selling directly from station and regional markets to earn a profit. Sitting in a station, dictating your own prices, and making a bundle of ISK sounds pretty good, right? It definitely can be just that easy, and though we're not relaying any get rich quick schemes, a solid understanding of how the EVE Online marketplace works and a tried-and-true trading method will at the very least prevent you from making some common mistakes.

The Language of the Market

"Buy low, sell high" is the mantra of the marketplace, and in the hypercapitalist universe of EVE Online, those are words for traders live by. If you've spent much time at all in EVE Online, you've likely done some direct selling and buying. You pay and get your item of choice immediately, or you lay down your items and get paid immediately. But there's another way to buy and sell, and with a little patience you can make a fair profit without ever leaving the station.

Buy orders and sell orders are a traders primary tool's, allowing them to set the price you wish to pay, or have paid, for items. While in other games you might set up a 24 or 36 hour auction, specifying a price that you hope someone pays, in EVE you can stretch these out for up to three months. This allows players to take advantage of longer term fluctuations in the market, especially during the ramp-up to an expansion.

A couple caveats, though. You'll have to pay extra for the convenience of setting up these orders, up to 3% of your total order (including order setup fees and transaction taxes). That's nothing to sneeze at, especially in margin or high volume trading, but fortunately you can shave that down to about 1% through skills (see below). And since nothing comes for free in EVE, traders lay down money and items to cover the value of these orders. For buy orders, you'll have to maintain an escrow account valued at 25% - 100% of the goods you're buying (escrow is lowered through the Margin Trading skill). For sell orders, though it sounds obvious, you have to actually have the item you're selling (i.e. you can't create a sell order that instantly sells what you're steadily procuring through an active buy order). After you're well established as a trader and have plenty of orders churning money into your wallet, that won't matter much, but you may not want to have all your money tied up in longer-term investments in the early going.

You can see the market in action on this item's market graph. It's price seems due for a serious rebound.

You'll spend lots of time buried in the View Market Details and Price History screens, so let's review some of the more confusing terms here. On the price history graph, the 3- and 20-day moving averages are fairly self-descriptive - they simply show the average cost of an item over a period of time plotted on a trendline. Using the 20 day helps show longer-term, more turstworthy trends, but if you're after a smaller, quicker score, the 3-Day can be handy as well. The Donichian Channel, despite it's fancy ring, simply shows the space between the highest price and lowest price an item sold for on a particular day. This helps to describe the price volatility of the item - a fat Donchian channel means there might be an opportunity to make a profit by getting in and out of the market quickly, while thin channels mean that the item is likely a longer-term prospect.

What You'll Need

Having a pure trader alt isn't a bad idea for the serious market manipulator, and the ISK you can make will eventually support the extra subscription through PLEX if you're good. However, players of all skill levels can and should learn the basics of trading, and you don't need to invest much or really any skill training time in trade to make yourself some money. If you're planning to make a pure trader, you'll want to max out your Willpower and Charisma attributes. Since you'll be buying and selling with other players, these stats don't make much difference when it comes to the actual buying and selling. But trade skills will lower taxes and broker fees and increase the number of orders you can have active at any one time.

Here's an overview of EVE Online's trade skills.

If you're serious about trading, you'll probably want to train Trade to rank 3 then get a few points in Broker Relations (with an eye toward Trade IV and Accounting) to whittle away at your overhead. If the 3% of your orders that goes toward setup fees and tranaction taxes doesn't sound like much, it's time to change your thinking. Anything that whittles away at your thin profit margins Procurement, Marketing, and Daytrading are all pricey and deal with creating and changing buy orders remotely. That ability isn't all that useful to station traders, at least early in their career.

Next, you'll need some seed money. It's pretty simple, the more money you have, the more you can make on even slight profit margins. You can either get some startup ISK the old-fashioned way (beggar it from more-established friends) or earn it through mining and mission grinding (quick tip: running missions where you play to trade can raise your standing and lower transaction taxes later on). But if you've got a little (real) cash, buying a PLEX in the EVE store and selling it for ISK online is the quickest, simplest and safest way. Click here for a description of the process. How much is really up to you, but I wouldn't venture into the marketplace unless you have at least 10-25 million ISK to spare.

If you dislike the calculator in-game and don't have much screen real estate to use the operating system's calculator, you'll need a handheld calculator handy to figure out percentages. You'll also need something that money can't buy: patience and persistence. Despite the numerous get rich quick guides on the Internet, most written with the idea of getting the guide author rich quick by raising demand for certain items, it takes real time and effort to be a successful trader. Now and then you'll score big, but since on many items you'll be competing with traders able to undercut all but the most energetic traders (and with huge capitalization to boot), most of your money will be earned through slim margins till you garner enough cash to trade with the big boys.

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