Basics chart analysis 1/3

As I had a very positive feedback on the german version of this post, I thought about translating, updating and expanding the part on chart analysis in EVE. The first two parts I will simply elaborate the informations that are available ingame, their usage and some history. In the third part, you will find some techniques I use / used with third party – tools and excel.

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EVE is also called “Excel in space”. The reason for that is obvious, because you encounter tables in every single aspect in the game, be it mining, trading, production, PvE or PvP. A newbro rarely gets a grasp on these tables or what they might tell him – it needs a bit of learning and thinking about what he has on the screen, after which he can use this information.

Getting informations from the graph ingame itself is not always easy, but concluding the correct informations is even harder and most the time a bit of an issue of instinct, which comes with time and experience. At first some words on the graphs itself: it shows the market data of one year of the most famous item of EVE: the PLEX or the “pilot licence” for capsuleers. Recently, this item suffered from a spike upwards, as… well, there are many theories and countertheories out there – it is up to you, which one you believe.

 

This graph however contains several informations: the traded volume per day, the moving average in 5 & 20 days, the median day price and the donchian channel.

1.) Volume traded
The amount of units traded every day is shown at the bottom of the diagram. This information alone is of little use, as it alone can only be an indicator of a stronger or weaker demand and therefore rising or sinking prices. For a more distinguished picture, we need to take into account one more information which is not shown in the diagram, but in the table alone: the amount of orders under the “table”-view of the diagram.

You can – in theory – get the amount of orders (which is a bit misleading, as it is more the “amount of transactions done today” and not “amount of orders currently on the market”) and calculate an “average amount of items sold/bought per order”. I said “in theory”, because this number is only of little use, as long as you do not get data dumps every hour or so. If you do this, it might be possible to locate regular rush-hours for this specific product.

2.) Moving average
The moving average is nothing more than the information about the unweighted mean over the last 5 (blue) and 20 days (orange). This means, that the price of all orders of the last 5 or 20 days will be added up and then divided by 5 or 20 – simple and easy, just as we all (hopefully) learned in school. This means, that the orange line with the mean of the 20 days will react way slower to changes in price than its counterpart. The picture shows this pretty good: the blue line always reacts faster than the orange one. If both of these graphs rise up, it can mean 2 things: that the demand is higher than usual or that the supply is lower than usual. Which one of these situations is correct does not really matter in EVE, but the consequence is the same. Either you start to produce the good now, speculate the on that the price is rising even further or do whatever you like to do with this information.

3.) Median day price
The median day price is a simple information, but other than the concept of the moving average, the foundation of the median is not always taught in every school. And also we need to keep in mind that not everyone in EVE attended school recently or is working with mathematical formulas in his everyday life. In our diagram, the median day price is shown as small orange dots which are not connected with each other. 

Anyways, the median day price is easily explained with a simple example. So let´s imagine that I have 7 Kestrels (a small caldari frigate) and sell one of them each day of the week at the following prices:
Monday: 1 million
Tuesday: 2 million
Wednesday: 3 million
Thursday: 2.5 million
Friday: 1.5 million
Saturday: 1 million
Sunday: 170 million (as a customer accidently forgot the komma)

While the average take the sum of all these sales divided by the amount of the results, the median is somewhat of the “middle” of all sorted transactions. The average price would be totally messed up by the one las tlucky transaction, meaning that we sold our Kestrel for an average price of (1+2+3+2,5+1,5+1+170)/7 = 25,86 million ISK. Obviously, this information is not useable.

You will see that the median on the other hand is quite robust against such exceptions. To see this, we need to sort the amount of data, beginning with the smallest number: 1, 1, 1.5, 2, 2.5, 3, 170. The median is the exact center of this numerical sequence: 1, 1, 1.5, 2, 2.5, 3.0, 17. So this means that the median of the same data is far more realistic than the average of about 25 million. Thats the way the median price works – but not on a weekly basis but on a daily one. It is easy to say that the median day price is one of the most hardest one to significantly manipulate as a single player.

The last two informations “donchian channel” and “min/max” will be the toppics of the next entry.
Fly dangerous o7.

What is ‘spacerich’?

Behold: you will see a huge amount of uneducated philosophy, wrong assumptions and borderline stupid conclusions. It is more to entertain and to casually elaborate, if the average capsuleer can consider himself rich. It is also just a blogpost about EVE Online, not an in-depth analysis of an economy or something like that.

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A question which comes to the mind of many capsuleers at some point of playing EVE: “am I spacerich?”. Right now, we live in times in which dreadnoughts, carriers and FAX are thrown into each others faces fight like frigates into a fw-complex. So is it normal for the average player to have 4 alts ready to camp in a Moros, just in case someone with only 2 working brain cells travels his shitfit-titan through a gate? Are you normal, if you pay your main via hard earned reallife money, even if you are playing this game for 10 years?

Well, the most likely answer to the second question is “no”. But the answer to “am I spacerich” in general is quite complicated. In RL, some consider a certain amount of net worth (e.g. 1.000.000 €/$/₤) as the border, others go quite a bit higher than that and multiply this number by a double-digit factor. And I feel already quite rich, when I still have a positive bank account at the end of the month, because student life without rich parents, only a small allowance from the german state and the nonexisting cash from a not yet founded startup.

So you see, it is also a quite personal question, when you are “rich”. The same principle applies to EVE – a smallscale pilot which only flies frigattes in fw-plexes will consider himself rich, when he can afford to fly his frigattes without a big need of gathering ISK. A miner who mines 12 hours a day is happy, when he… well, when he can mine.

This is the reason why we fist need to simplify the possible answer to this question. So lets take a relative approach. Lets take germany as an example: if you have a single net income of around 3.700€, you belong to the top 5% group of income. While in the USA you need almost 7.000$ on average to reach this position. I will not dive into a deeper analysis regarding currency exchange, purchasing power parity, taxes, additional costs like health insurance etc., as this could fill books and this is not an blog about economics. But it is safe to assume that with this money you are able to afford a house, two cars, a good lifestyle, holidays abroad one to two times a year, college for your kids and a retirement fund which does not let you chose between beein suffocated by your nurse or starving to death in a run down retirement home. So yes, I would say this is rich in comparism to what the other 95% have (even tough many people say “no, I am middle class” with this amount of money…).

Also there is a graph in EVE which offers data to this discussion. So lets just take this 5%, transfer it to EVE and assume that the top 5% of players represent the “spacerich”-group. Yes I know – beeing rich is subjective. Yes I know – corporate assets are excluded. But this debate will never end, if we include all of these factors, because we cannot know all factors (hell, I guess even CCP will not know all of this), let aside including it. And as the income distribution in the USA and in EVE is quite similar, we will go with this assumption. Deal with it.

wealth distribution USA (source)

official distribution of wealth among the players in EVE (source)

According to this graph, 80% of players in EVE own 10,5% of all liquid wealth. In the USA, the same ratio owns only 7%. So EVE is a bit more balanced regarding income equality than the USA. Just let that sink in: the most nerdy spaceship-game of all time, advertised with the argument that you can rob, kill, betray, lie and backstab as much as you want, has a more equal wealth distribution than good ol’ murica. Land of the free, land of the poor, land of the pathetic orange presi…

Sorry, I digressed

… and thats why I became my own grandfather by marrying my dead stepsister.

Anyways, back to toppic: now we do have an rough estimation on how much ISK is in the wallets of the characters and how it is distributed among the playerbase. And yet again: dont take these numbers for granted. First: the data is around half a year old. Second: corporation assets and non liquid assets (aka items, ships, modules, ammo etc.) is not taken into account. It is purely an estimation on how much ISK is lying on the wallet. So no, your blinged-out dreadnought-fleet with officer-invuls is not accounted.

Now we need an estimation on how many players are actually playing this game. The last official numbers from CCP stated, that EVE did breach 500.000 subscriptions in 2013. Problem is, that this number included the chinese subscriptions. And as we are right now in the middle of 2017, this number is also heavily outdated. So it might be a bad idea to blindly assume this number. There is a good analysis to this number from 2015, which puts the number closer to 350.000 players on Sisi.

Again, we not realy have precise and up-to-date informations and need to rely on estimations. So lets be a bit conservative about this and give it a go with 300.000. But we also cannot blindly take this number and go for it – we need to at least consider the fact, that many capsuleers have more than one account. So lets divide this number by the confirmed median of 1,5 alts per player and ignore the fact that many players with much ISK most likely has way more characters than the spacepoor newbie who started playing EVE last month (hell, I have 10 paid accounts…). Now we are around the mark of 200.000 players. Just let us stay with this number, as we can discuss this issue over hours.

The final calculation would be something like that:
773.780.587.844.708 ISK * 65,91% / 200.000 players * 5% = 50.999.878.545 ISK per player

So one could say that if you are borderlining 51 billion ISK on your wallet, you are part of the top 5% of EVE players in respect of pure ISK alone.

Yes, without corporate assets, characters and items. Yes, with skewed assumptions which might be or are indeed completely false, e.g. because this number is just the average amount of ISK a player in the top 5% owns. Because of this alone, you can safely say, that you need even less ISK to be considered part of the top 5%. Me personaly, I would say that this number is more around the mark of 10 to 15 billion ISK.

But after all: this is just an estimation. EVE is not about becoming rich on a virtual currency, which cannot pay your bills – it is about having fun. Because it is a game. If you are content flying Merlins and Caracals in FW, this is fine. If you are happy hauling in highsec with a freighter: this is fine. If you like to mine, it is the same for your accountant in RL: thank you for your service, someone needs to do (and like) this boring stuff. Dont chase the dream of beeing rich because “rich = good”. Most of us run this hamster wheel our whole life, it does not need to be that way in this lovely game we all like to play. Even tough it is considerably more easy in EVE to let the wheel running by itself.

 

Tl;dr: if you have more than 15-20 billion ISK in the year 2017, you can consider yourself borderline spacerich in respect of your wallet. This number is flawed and most likely wrong. Now go and do something you like in EVE.