Monday, August 6, 2012

Technical analysis of entropia calypso markets.  The idea to be explored here is one item or a small group of items represent the whole market of 3000+ items in entropia universe.  The items I choose to look at are basic sheet metal, metal residue, and sweat related items.  They meet criteria for; widely traded in entropia terms,  nearly a commodity, enough volume to represent a significant part of entropia's economy, and easily tracked (one of each needs to be kept in inventory to check prices with market value tab).
Basic Sheet Metal will vary between $500-$5000 a day.  I find it depends on time of year and current demand, and often, time of week.  Markups are also high on basic sheet metal reflecting the cost of materials to make it. As a day-to-day trading item it is difficult to trade profitably.  Manufacturing basic sheet metal, then selling it, is the way to go.  The high markups leave room for some profits on inefficiencies in manufacturing, buying and selling basic sheet metal.  Most items do not have the markups needed at 5%+ margins.  Basic sheet metal does.  The volume is among the highest in the universe. 
The technical analysis part is in comparing other component commodity items to basic sheet metal.  For example, metal mountings, standard plate, basic sensor, simple i plastic springs, simple i conductors, and a few others.  As basic sheet metal moves so do the others.  Say you notice basic sheet metal over a few days.  The markups are heading up at a 1% more a day.  There is a safe assumption that other items markups are also heading up around 1% also.  Then the markups start heading down 1% a day.  The other items will also be showing a downward pressure.  When following the maxim of buy low and sell high, knowing where the items' trend is, can be useful.
Personally the price moves affects how much I am willing to pay for resources to make the basic sheet metal.  On market highs I am more cautious as I know the price can fall fast over just a few days.  That affects how much I price my basic sheet metal at. For low periods of markup I look for better deals on resources to make basic sheet metal.  There are profits to be had being concious of the price and markup variations.  As for setting price that is a another discussion.
So on to Metal Residue.  Markups are low, it is a commodity, as a day to day item there are usually several orders for $1000 or more of residue.  The volume varies but is usually at least $5000 on up to $10000 and $15000 per day.  It meets the criteria as a barometer of the entropia economy.  Tracking residues prices' shows how much of limited (L) items are being made.  The technical analysis part is not so much that residues can be traded, though they can be, but that the sale and purchase of them represents the level of activity in end-user items where the residue is used. Markups on residues are fairly stable and won't vary more than 10% over long periods of time.  A 1/4 percent to 1% move is most common on day to day markups.  There are profits in residue trading but they are slim and better used to make end-items.
Considering the above three items, their markups, volume, and prices can be used to compare the same features as the 1000's of other items in entropia universe.  The same things can be said about the other items as about the above three items.  The markups, prices, and volumes do this, and markups, prices, and volumes, do that.  They are like individual markets to themselves for each item, though they can all be compared, aggregated, and made to get a clearer picture with comparison and contrasts of the entropia universe economy through technical analysis.
So to summarize, one aspect of technical analysis that can be applied to entropia markets is one item or a small group of items can represent a wealth of information about all items in entropia universe.

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