Thursday, April 25, 2013

Paradigms and Perspectives

I've been reading a lot of Merchant Monarchy lately and mulling over our polar opposite perspectives.  I've never had a taste for margin trading, so perhaps our methods are meant to be opposite.

The War on the "No-Lifer"

This is an admirable goal, and one all traders should strive for.  Diddling on the 0.01 ISK game is irritating, and though there are methods to combat botters, playing the small-change game is silly.  

I personally am in the camp that "game mechanics reward this behavior".  Half because trying to play otherwise is doing more damage to your bottom line than anyone else's (on the short scale).  Half because those who think they know better usually overestimate their skill or intuition.  I've been in many a market where someone did irreparable damage to a margin because they were sinking the price on too much volume.  I've cleaned out orders to spike prices.  There is an art to margin trading, and I have never been able to make that playstyle work to my satisfaction.

But the theme is admirable.  The goal in any ISK generating endeavor should be minimal effort for maximum return.  If you're babysitting 100's of orders trying to keep ahead on the 0.01 ISK game, you're gonna have a bad time.

The "Sheep"

Again, our philosophies diverge.  Personally, I try to follow the herd, the mentality being "make hay while the sun shines".  I get the general consensus that being in the herd will lower final returns vs being on the cutting edge, but when it comes to :effort: vs ISK, I have found it's great to blend in with the sheep.

I understand that participating in the herd this way makes me liable to run off the cliff, which I have done.  But my personal philosophy is closer to "fishing" than "herding".  I use my tools to take a look over the whole spectrum of possibility, then zero in on the trend of the week.  I usually miss the peak, but when the margins are this wide, there's still plenty of ISK to be made.  As long as I'm near 5% of the peak, I count it as a win. Mostly because chasing the edge of bubbles would lead me to madness!

Being a manufacturer, I am absolutely playing either a predictive/speculative game or a follow-the-leader catch-up game.  Thankfully, the cycle times on T2 and the costs associated with broad-base production give me an edge when I can quickly switch products while my competitors languish on the wrong product.  Also, having a large operating purse gives me the ability to change directions on a dime, rather than being stuck to worse products.

Another advantage I have is hiding in the crowd gives me the fastest path from product-->ISK.  By participating in the middle of any particular market, I can nearly guarantee my predicted margins and quickly cash out.  Though there are a ton of places I could technically be making more ISK, I avoid them because the market velocity is not on my side.  By hiding in the herd, I can quietly milk ISK out of the market and neither turn heads nor fall victim to price adjustments out of my favor.

To abuse another cliche, "I don't have to outrun the bear, I just have to outrun the slowest friend"

Can't Argue With Winning

At the end of the day, as long as you're making money and having fun playing the game, who can say you're doing it wrong?  This is the nature of the sand box.  My method is (nearly) perfect for my goals.  I'm cashing out billions per week, and my operating purse is at a suitable scale to allow me all the flexibility I need.  

Would I love to be ahead of the curve?  Absolutely!  But IRL is putting a terrible damper on my ability to build new tools.  If I can get better visibility into perspective products, specifically ships, I should be able to improve returns.  Regardless, I need to find something to help ride out the summer doldrums which are quickly approaching.

Also, if I may Pull a Johnson.  Working on a shiny-new-big-awesome-sekret project.... SHHHH, I can't tell you about it yet.