Tales of Tyria Podcast Feed
Tuesday
Jul312012
Tales of Tyria #42: Buy High, Sell Higher
Bridger | Tuesday, July 31, 2012 at 8:50AM You've heard us talk about it for weeks, but now we finally sit down with Freelancer to ask and answer one simple question: How in the world did he make so much damn gold in the beta events? We discuss many ways to make money in Guild Wars 2, from Market Trading to Gathering and selling. By the time you're finished listening you might have a headache from the math, but you might just come out of it a bit richer as well.
Episode 42:
- 2:45 - News: New Guild Database, New Guild Recruitment Tool (Playdate)
- 8:28 - Roundtable: Making Money in Guild Wars 2
Question of the Week - How much time are you willing to spend on the Trading Post?
Let us know what you think and send us feedback. Also, watch us live on Sunday nights @ 7pm EDT.
Reader Comments (54)
I realy like your show and think your a great host Bridger but for the love of god change background to somthing a bit more epic! ;p
Just think the other you used before "somthing war" was alot cooler. It looks realy dull the one you have now..!! Hope you dont get upset just my opinion. :)
"Question of the Week - How much time are you willing to spend on the auction house?"
Ya even had to mess it up in the show notes didn't you?
If only I had these pieces of informations earlier in my gamer's life, I would not have spent weeks figuring them out by messing with auction houses, you are awesome!!
Please, never stop the good work ^-^
@Copyright
You mean trading posts? =P
Doh! Blame it on lack of sleep :P I fixed it now.
Hey guys, I love what you're doing here but i gotta say one thing. In arena net there is an economist who controls the market to prevent the 9 to 30 inflation. I discovered this during BWE3 when i tried exactly this/ Immediately after buying the mass amounts there was a new set of mats for an exact amount every time you buy the lowest price. While this gradual inflation will work if you do it over time it is unlikely to work in GW2 as it does in other games/RL
Some good information, lots of props, but I don't totally agree with Free. First, you don't have to buy "high" in order to sell "higher". Under the hypo you gave (buy order 9, sell order 20), you could place a buy order at 10 and buy as much as you can at that price. Then, you can still stage a fake buying order wave ( buy orders at 11, 12, 13, etc) and just sell high. By doing it that way you eliminate the risk because the average price of copper is 13, which you bought for 10.
Secondly, I don't find Free's negative response to people who buy low and sell high appropriate - that business structure is the foundation to many reputable business strategies (Free states that he trades stocks - excluding shorting a stock, the point of the stock market is to buy low and sell high!!!). Furthermore, while I agree with Free that monopolization is not good for the game, why does he think his buy high sell higher method that stages fake and misleading buy orders is any better. Free attempted to explain that his reason for doing this was to essentially teach the buy low sell high "bad guys" a lesson, but that was a weak explanation, at best. Ultimately, by doing this, Free is filling up his pockets with other players' gold by using deceptive business practices... somthing Free himself allegedly frowns upon.
Don't misunderstand me, however. If the games don't say it's illegal to do this type of activity, I have no problem at all with Free making his money this way (Free is just a hustler, and there ain't nothing wrong with that). I just have a problem with him saying negative things about other practices when his own practice is just as unethical.
What about Days of the week as far as buying and selling gems or other stuffs?
Would it be wise to keep any ore as an ore and only smelt when you need?
Also, when freelancer does his magic, I suppose that would be a good time to fulfill buy orders, riding on the increased price that he's created?
I think I understand what freelancer says. When the price is low, buy from sell orders. When it's high, fullfill buy orders? I was an auctioneer junky. It was more about buying and selling in mass and making pennies at a time that eventually stacked up and make you alot of money!
Also, you can't have a market without dumb players.
PS. Freelancer, you both encourage me that I can make money while at the same time making me feel really crappy and crush my dreams of becoming super rich. I can't make 600g by myself.. but i'll try 100 ?
Reposted from my comments on Youtube (edited for profanity)
So, let me get this straight:
Freelancer complains about how people manipulate the market, and those people looking to make a 'quick buck' disgust him.
Yet he manipulates the market to a greater degree that the individuals he complains about COMBINED!.
It is the exact mechanic Goldman Sachs used in 2008 to manipulate the Oil market and dramatically raised the price of gas
This has convinced me to abandon Crystal Desert.
He argues that the above traders should be banned... **enthusiastically loving** hypocrite...
He claims that he is actually defending players who actually use the mats for crafting, by guaranteeing them a fair price. This is a false claim, as what he is doing is damaging the actual production capacity of the resource gatherers.
Illustration: John is a miner, he mines ore all day to bring to market. We like John because he actually provides the basis of the economy, the raw material.
Now John spends most of his day mining, not watching the market. According to the pattern of trade that Freelancer mentions, the one hour cycle (which I agree with the principle, but not the frequency), there is a decent chance that one of the times that John comes to market he will see his ore valued very highly, and be excited!, he will then put his ore up for sale at the highest price (or slightly lower, depending on his savvy) and hurry back out to mine some more, dollar signs in his eyes.
After another period of time, he comes back with a fresh batch of ore and realizes, that not only has his ore not sold, but now the market is very depressed from when he originally posted. So now he has to eat the listing price, and if he's gonna sell his ore, he has to post it much, much lower than he anticipated. Once that gets sold, he now no longer has any incentive to go back out and mine again because he can make far more profit just questing or salvaging drops.
What happens then? The supply for the ore market tanks.
And conveniently, here is Freelancer sitting on a metric **gently caressing**tonne of ore, ready to sell to a desperate market who just needs their mats.
Freelancer, you claim to be doing a noble act, that you're equalizing the market, but all you are doing is chopping the legs out from under the producers.
Those, for lack of a better term 'day tradeposters' that he so claims to detest, what about them? They just laugh and adjust their approach, maybe switching commodities.
What those 'day tradeposters' actually do is create a higher price for resource gatheres like John to get paid when they sell their gathers. This feeds the economy from the ground up, proven time and again to grow the most stable and widely rewarding economies.
Freelancer, I am calling you out right now. You are a market-manipulating **posterior**hat with no other goal than the funding of your guild's fame through upgrades and siege equips in WvW (And therefore dumping all of your ill-gotten gains straight into a money sink, disappearing it from the economy forever).
Your feigned altruism disgusts me.
In fact, your underhandedness so incenses me that if I were independently wealthy, I would happily sink several thousand dollars a month into gems just so I could undercut you and sell at a loss to prevent the damage you are about to do to the game.
That's right, I would be willing to pay real cash to prevent people you from tanking the economy.
I am currently drafting a letter to ANet detailing exactly why what you are doing is dangerous, and why you should be banned.
While I agree with Esquire that Freelancer is a hustler, I disagree with his assertion that 'they're ain't nothing wrong with that'.
The current state of the real world economy demonstrates clearly how dangerous a 'hustler' can be, especially when they can leverage such a huge percentage of any given market.
Freelancer babbles on about how bad monopolies are, and then goes on to make the single largest commodity monopoly on the whole **carnally engaging** server.
@Arglebargle
you said : "This has convinced me to abandon Crystal Desert."
From what I understood the Trading Post is global to all servers, no escaping.
@Carmedil
**checks the wiki**
Well.... fuck.
Looks like I'm out $60 then...
Well, at least Aion is f2p now...
Freelancer, you have no idea how much I hate you right now. I hate you enough to punch kittens... and I _love_ kittens...
There were two things you guys referenced but never discussed. You guys mentioned a trading post cut.. how.much is it? Also, in the show notes you put something about trading gems for gold asap or waiting but never discussed it.
@Arglebargle
I cannot understand why you think anything Freelancer is doing is hurting the game. He's doing exactly what he's supposed to be doing. The entire reason the market is there is for people to take advantage of it. Some people like questing, some like PvP, some like crafting, and some like playing the market.
You are acting as if he's ruining the game for other people, which is completely false. I can assure you that Anet already knows about every method he's using. Eve Online is a much more intricate economic system which GW2 seems to have been inspired by, and it is much more cutthroat than GW2.
I think you are making a mountain out of a molehill here, especially since the way to avoid these shenanigans is simply to be aware of their existence, and here he is making thousands of people aware of this and how to avoid it.
"There were two things you guys referenced but never discussed. You guys mentioned a trading post cut.. how.much is it? Also, in the show notes you put something about trading gems for gold asap or waiting but never discussed it."
I don't know how much the listing fee is for items. It's probably something like 2-4%.
I goota agree with Argle here .. but maybe not quite to the same level of rage.
Free mentions that he hates people monopolising the market but his buy high sell higher tactic is a monopolisation. He is buying up all the reasonably priced items to artificially inflate the market. A monopoliser buys up all the reasonably priced items to atificially inflate the market. He then sells at the new artifically inflated price ... just in the same way a monopoliser sells their newly purchased items at an artificially inflated price. Justify all you like but the two tactics are one in the same. You are manipulating a free market economy through purchasing power and just because you equalise the market at the end doesn't mean you haven't done the same thing.
This is actually far worse than identifying cheap items and purchasing while the supply is temporarily high, then waiting for the market to return to a more standardised equilibrium. Identifying a cheap item and waiting fro the market to correct itself is the basis of a free market economy. As is selling when the market is high. Driving the price to profiteer is really just creating a market failure. I could list example after example from the real world but it boils downs to the same result ... the average punter gets screwed, the producer gets screwed, and 1 greedy party drives away in his Supercar patting himself on the back for thinking how clever he is; always with the same mantra of "This wouldn't work if people weren't so stupid/greedy".
Don't kid yourself into thinking this is ethical or moral. It clearly isn't. The only thing that makes this palatable is that it's a game and people aren't putting real money on the line.
Rant over.
@ Lightweight
>Your whole post
Exactly!
My enhanced sense of rage comes from the fact that I am highly invested in this game, emotion wise.
I have maintained a very high level of excitement and anticipation for several months now.
And now I find out that one of the features I liked best about the game (The ability to put trading post orders in) is pretty much going to ruin the economy.
Also, Free's attitude and hypocrisy in the video really pissed me off.
@ Bridger
Look, I appreciate this vlog, and I have been following it off and on quite a lot during my wait for Headstart. In fact, it was the earlier video concerning the split economy that really got me into exploring the possibilities the trading post offers.
What really torques me about Freelancer specifically in this video are as follows:
1) His attitude towards commodities traders, especially concerning his blatant hypocrisy
2) His assertion that what he does actually benefits the majority of players by bankrupting the commodities traders
protip: I was one of those commodities traders he detests, I saw his market manipulations and rode the wave appropriately. Granted, I didn't profit nearly as much as I had projected, but far from bankrupting me, I actually walked away with around 150 gold, and I only spent about 30% of my time 'day tradeposting'.
So basically, the only people he benefited were himself and his Guild.
The people I benefited were myself, my Guild, and all of the actual product producers, so 'day tradeposting' is actually more altruistic than the crap Free is pulling.
3) Making people aware of it will not prevent it from happening. On the contrary, now there are thousands of people who were unaware of this practice that are now going to use it.
One can argue that a highly competitive market is an optimized market, and this might be the case in the real world, where regulation and oversight are a part (or should be, at least) of any economy.
In a highly simplified game economy, the only thing this does is to radically discourage new or unskilled traders from even participating (As I illustrated with my John the Miner example).
You brought up the point of Eve Online. That game is a NIGHTMARE for new players. The only thing that has guaranteed it's survival is the rabid loyalty of the players it happens to appeal to.
Do we really want that to happen to GW2?
One of the best aspects of GW2 is that it is very friendly to the casual player. Can you say that the economy for Eve Online is casual friendly?
And as a final note, yes Free made Anet aware of his exploits, and this actually bought him a modicum of respect in my eyes, but that is far overshadowed by his assholeosity and greed. Additionally, I am dreading what safeties that ArenaNet will now have to put in place to prevent this from happening again.
It kind of reminds me of the rampant bank-camping in Ultima Online before PVP restrictions were implemented.
@Arglebargle:
Nobody will force you to trade goods at the market...take it or leave it.
@Bridger:
And whats about those spreadsheets Freelancer wanted to post on reddit?
@arglebargle,
I wouldnt be worried about it. People like Freelancer are mostly talk, and try to look good in front of their guild and viewers. At the end of the day, real market people, like myself, will own Freelancer and his rookie business tactics. As an MBA grad from UCLA I can tell you that his buy high and sell higher practice is simply ludicrous. As someone else stated above, that practice adds so much unnecessary risk that it made me realize that Freelancer is NOT someone you need to worry about when it comes to the market.
Put it this way, now that there's a global market, I hope he tries that silly practice so I can bust him.
@ lookslikeyou,
Agreed, the risk with free's tactic outweighs the potential return on coomon commodities. People will be able to keep selling into his over priced buy offers and if he only wants to operate in a short trading window he may end up with lots of massively overpriced commodities in his bank ..... Let's hope so.
@ Trexder
Nobody is forcing you to play PvE, nobody is forcing you to play PvP, nobody is forcing you to play WvW, nobody is forcing you to do jump puzzles.
But if you ENJOY doing Jump puzzles, or PvP, or whatever, and suddenly your enjoyment is being radically diminished, then I would expect you to be unhappy.
The economics of this game is one of the major features I was looking forward to, so one of the major reasons I actually bought the game is moot, and you still don't understand my unhappiness?
@ Lookslikeyou
He was more than talk, I observed his occasional market manipulations directly first hand. The second to last day of BWE 3 was the worst of it, with copper ore spiking at 55 copper, placing it out of reach of the casual metalcrafter, and that isn't even mentioning the abomination that became the slow-growth iron ore market.
Thankfully scales and leathers were still pretty untouched.
I may not be a formal student of economics, but I have been participating in digital economies since the late eighties with Tradewars and BRE, and am no novice to activity driven markets. What I do know is that, while a single market manipulator can do great damage at the proper time (again, the Goldman Sachs oil manipulations in 2007-8), I know for a dreaded fact that there will be dozens, if not hundreds of people using this same tactic now that it has been outed once the game goes live.
I guess the burden placed upon us is to find creative ways to persist in the coming highly competitive and ultra manipulable market.
Who knows, the quick feedback time and response loop of GW2 might actually be a breeding ground for new economic strategies applicable to real world markets.
Free, you're still a hypocritical cockmongler.
That's like saying "Freelancer is ruining my enjoyment of PvP because he's better than me at it. Someone ban him so he can't be better than me!" Part of playing the market is potentially getting beaten by someone else. He didn't do anything outside the bounds of the game, so he didn't do anything wrong. You're boxed into a little corner of the possibilities and anything outside it is "wrong" for some reason. If you don't like what happened, blame the game, not the player. The game allows this to happen, it's part of the design. You may not like the design, and that's OK, but Freelancer didn't design it.
That's like arguing that Highway speed limits shouldn't be so high because they are too dangerous, and then blaming Freelancer when he passes you driving at the speed limit. Saying "speed limits are too high" is fine, but to blame a driver for following the rules of the road isn't.
This is laughable. Just place a buy order at a reasonable price and go to sleep. By the next day you'll have plenty of copper without giving any of your money to Freelancer. If everybody did that, he wouldn't make anything. This is why Awareness makes this whole thing moot. As I said on the show: The key to spending less/making more is PATIENCE. Place a buy/sell order for what you think the price should be and WAIT until it goes back there. If it never goes back there, it means you're wrong about where the market price is. If you're right, you'll get your money/mats in less than a day. Freelancer said the market recovered in less than an hour in the beta, it will be even faster in Live.
Yeah, I really don't understand where ArgleBargle is coming from here. He claims he was excited about the market in GW2 and looking forward to trading on it, well what is the main purpose of trading on the TP? To make money. So because Freelancer has his strategies down (he's even told you some of his tactics) you're crying because he will 'out-trade' you in game?
Personally, I'm really glad that Freelancer has shown that market manipulation is possible in GW2. It makes the market prospects so much more exciting and I can't wait to be trying to maximise my profits in a competitive marketplace.
@ Bridger
>That's like saying "Freelancer is ruining my enjoyment of PvP because he's better than me at it. Someone ban him so he can't be better than me!"
1) He was the one to go to Anet first suggesting bans for people who were using the market just as it was intended.
2) He isn't better than me, he can leverage the wealth of an entire guild, plus whatever he put into gems.
3) You're biased as fuck and your sardonic attitude is about to lose you a subscriber.
> You're boxed into a little corner of the possibilities and anything outside it is "wrong" for some reason.
Do you have any clue that the things he is planning to do to the market can seriously disrupt the entire economy? My personal stake aside, if he continues to do what he posted, he will completely cripple the mat production aspect of trade, and without that THERE IS NO TRADE. Step outside your narrow perspective for a moment and follow his pattern to the logical conclusion. There will be NO incentive and very high risk to gather for the purpose of sale. This will require every tradeskiller to gather their own mats.
This is currently happening on Aion/Israphel to the point that there are so few pots being posted to the broker any given day that fort sieges/defenses have pretty much become a waste of time for the Asmo faction. And this is even without the possibility of placing buy orders to manipulate the prices.
Also, you again ignored my real world example of our currently inflated gas prices. There was serious concern from economists in 2009/2010 that the transport infrastructure in the US was going to become unsustainable. Do you have have ANY CLUE how devastating commodity price manipulation can represent to an economy?
>This is laughable. Just place a buy order at a reasonable price and go to sleep. By the next day you'll have plenty of copper without giving any of your money to Freelancer.
Yeah, now I see why Free does the trading for the guild and not you.
What incentive does the producer have to sell to me when Free can easily outbid every single individual on the entire market for every unit of resource that is sold? There are only 3 ways that this pattern can be broken:
1) Freelancer messes up or takes a break for a few hours and the market returns to a semblance of normal. Keep in mind that this isn't controlled by anything except him, so no amount of savvy on my part can affect this.
2) A huge volume of commodities coming into the market far above it's actual consumption. Over time this will eventually make the stockpiles he is holding bear-worthless. This will still not be a detriment, because tens of thousands of mats that are near-worthless still represent hundreds of gold, or even better, thousands of gold of finished goods.
3) Market regulation by Anet (which would be disastrous for all involved)
>If everybody did that, he wouldn't make anything. This is why Awareness makes this whole thing moot.
No, it does not, it simply creates an even more highly competitive market where the casual player has no opportunity for growth, and the only people benefiting from the trading post being the people that can leverage so much that even a handful of copper above the list price will net them hundreds of gold from massive sell-offs.
In a very practical sense, Keynesian economic theory has proven itself to be a disastrous failure for the vast majority and a raging success for a tiny minority in the real world, the impact of these practices (i.e. a highly competitive market being considered an ideal market) on an enclosed, digital economy with a turnover several orders of magnitude faster than a real-world economy will be far more acute.
>The key to spending less/making more is PATIENCE. Place a buy/sell order for what you think the price should be and WAIT until it goes back there.
Look... I'm not trying to be rude when I say this, but you really have no clue what you are talking about. I am sure it sounds good to you, and you might even be able to squeeze a few silver out of it between filling your hearts. But as for a long term profit strategy, it is about as effective as investing in Team Fortress 2 hats to provide a steady working income.
Freelancer's tactics have nothing to do with skill, and everything to do with leverage and a complete disregard for the long term effects.
Could I get the same results by dumping a few hundred into gems then into gold? Easily, but then my goal is to NOT ruin the entire in-game economy.
I appreciate you trying to come to grips with something so outside your sphere of personal experience, and you actually did a reasonably good job in your first video about economics in Tyria. Do not let that minor success fool you into thinking you have a handle on macroeconomics.
The only way this conversation progresses is from input from people who grasp the finer details of trade, so basically this: Either Freelancer enters into this discussion or it is meaningless.
Since he has dodged every critical statement made on here and at reddit, primarily answering only those who stoke his ego, I seriously doubt this is going to occur.
Also, protip: 20 point quoted text makes you look really cool.