UPDATE: The sale of MYMMOshop.com to MY MMO Inc. has recently been called into question. We are investigating this.

The web site MyMMOshop.com has been sold to My MMO Inc. for a whopping $10 million dollars. This is an extraordinary amount for a website, and in a recession no less! We decided to take a look at the value of this site is in VIRTUAL terms to see how much the site would be worth in the world’s currencies that they trade (see spreadsheet below).

My MMO Shop sells virtual currency, in markets with high demand. It is very similar to the currency exchange market in terms of the way they operate, except the the economy is a ficticious one rather than the real world economy.

The site sells virtual currencies from some of the biggest online multiplayer games in the world, and is considered to be in the top 3 “real money trading (RMT)” websites in the world. These Massively Multiplayer Online Role Playing Games (MMORPGs) have real world virtual economies behind them with.

The company has succceeded with two important tenants: 1. strong anti-fraud initiatives including requiring voice authorization. 2. Excellent 24/7 customer service. These important points have helped to make the site a leader in the space. There economies are substantial, with each currencies essentially ‘trading’ against US dollars or Euros.

Real money trading has not been looked on kindly by MMORPG communities and developers. The purchasing of virtual currency was widely regarded as an unfair advantage to those who had spent a lot of time to develop accounts. Capitalism has prevailed though for good or ill though, the trend has caught on, with the GDP of some games eclipsing those of small countries. Serious gamers now spend thosands of dollars per year to equip their gamers in the now $2 BILLION dollar industry (that’s a lot of WOW gold). The creation of Sony’s own RMT site – Station Cash – has helped to bring legitimacy to the industry that is proving to be recession proof.

As big fans of currency trading ourselves, we decided to take a bit deeper look at the conversion rates So we decided to run some quick calculations to see just how much MyMMOSHop would cost in the games they are trading currencies for. Here’s what we came up with:
Our two favorites – the site would cost:

$391,696,043,869,957.00
Eve ISK’s

and

$17,110,981,828,137.30
Star Wars Credits

**Pricing is based on information from MyMMOShop pricing for highest volume of currency available.

Resources:

• Yahoo Release on MyMMOShop.com
• VirtualEconomics.info
• Virtual Economies Wiki Definition
• Techography.com
• MyMMOShop.com

The USD has taken a beating against the Euro in the last week with news of Wall Street meltdowns. We have recently broken above the 38.2% Fibonacci lines with the next resistance level not until 1.4949. That’s almost 200 pips of additional upward potential for traders.

The theory is a basic framework used to predict market swings based on a general theory of market psychology. It is treated with a good deal of skepticism among academics. However, many traders have more confidence in it.

The theory describes market movements as responsive to real-world events, but those responses follow a similar pattern that derives from the psychology of those trading and can be applied over a number of different time frames.

At its most basic, Elliott wave theory predicts a market will react to an event with a series of 5 distinct waves. In the 1-5 series, waves 1, 3 and 5, the price moves in the direction of the overall trend. Waves 2 and 4 are correctional movements that go against the current market trend.

So, if good news hits the market, Elliot wave analysts would expect three upswings in price seperated by two corrective downward movements. Bad news would lead to three identifiable down turns and two corrective upswings.

For example, if you think you’ve identified an Elliott wave pattern that predicts a large increase in the value of, say, EUR/USD, you simply place the appropriate buy order and protective stop-losses – in case you are wrong – just like you would when you believe you’ve spotted any other market pattern.

As you might be able to tell from this extremely general example, Elliott wave theory is one of the most broad and generally applicable ways of thinking about markets that traders use.

As noted, these waves can take place over different time frames. Elliott wave analysis applies itself from the very most short-term patterns to the longest. Here are the names of the waves by time frame, from least to greatest:

· Subminuette: minutes

· Minuette: hours

· Minute: days

· Minor: weeks

· Intermediate: weeks to months

· Primary: a couple of months to a couple of years

· Cycle: one year to several years

· Supercycle: a few years to a few decades

· Grand Supercycle: multiple decades or longer

Given that much of the trading on the forex markets is not driven by market psychology, but by firms that are buying and selling currencies for purposes of international trade, Elliott wave theory offers less explanatory power and predictive ability for the forex market than it does for stock markets.

That being said, it is a mode of analysis that many traders find especially useful – if not as an exact predictive tool, then as a useful framework to view market developments.

Interestingly, Elliott developed his theory without having been educated on either the Fibonacci sequence or other important breakthroughs in mathematics. Despite the appreciation of Elliott’s work as mathematically ahead of its time, social scientists remain skeptical of its usefulness.

The problem is the same as that of many so-called predictive theories: They are so flexible in their framework – there is so much “art” in their real-world application – that they can be made to look like accurate portrayal of how a market works in retrospect very convincingly. However, using the theory to predict the future is open to so many subjective points of analysis that two different Elliott wave analysts could come up with two entirely different projections.

Nonetheless, it is useful to keep the pattern in mind, even if it statistically can’t be proven to occur any more frequently then random patterns. By trying to fit the market’s movement’s into a pattern, you can get a sense of where the market will go.

In the end, the Elliott wave is a more generalizable example of a common chart pattern. Like a double bottom or any other pattern, a good trader can keep an eye out for a textbook case of the pattern, and use that framework to trade effectively. A good trader, however, never puts too much faith in these simple patterns – if the markets really were that predictable, everyone would be making the trades as soon as the pattern shows up, and the patterns would therefore fundamentally change.