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Item Price Stability

I leave for two weeks and you all accidentally the market. I was not able the participate in the Odyssey speculation, but I am enjoying catching up on it.

2013.05.16.19.26.13-12013.05.16.19.25.40-1

The wild swings that we are seeing in the Moon and Ice markets due to Odyssey adjustments made me reflect on the stability of the items that I trade.

I used my historical database to come up with a report to provide quantitative insight to help give values to the items that I instinctively know are high risk. Here is a snapshot of the lower and upper items listed in my Stability Report that covers three years of trading sorted by standard deviation (σ).

2013-05-15_price_detail

Here are some general observations about the items listed:

  • Basic minerals, ammo, and modules are the most stable.
  • Capital modules weigh in somewhere in the middle.
  • Tech2 ships fill the upper band of the report.
  • Tech3 hulls and associated Subsystems are randomly spread over the middle band.
  • Certain battleships are high on the report because their popularity has changed over time due to shifting fleet doctrines.
  • The Procurer BPO was an item that I speculated on heavily during the last patch, which netted very positive results.
  • Capital ships are subject to large swings due to mineral price changes.

A tenant of becoming a good trader is minimizing your risk while trying to maximize your rewards. My advice for new traders is to work with more stable items as shown in the shaded green area of my report; they are subject to less swing and therefore will help minimize risk. As your ISK resources grow, you can move into riskier items that will [hopefully] yield larger returns.

Update

Thanks for all the feedback in the comments. I actually spent some time recently to figure out how to calculate item volatility here https://k162space.com/2013/08/20/hac-price-volatility/. I’m working out how to pull numbers for all my data for a new post soon.

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