PsychoBanker Description
PsychoBanker is a simple concept, based on the so
called game theory, for which already 8 nobel
prices have been awarded. Let us first explain the
rules of the game and in a second part give you
some advice on strategies.
PsychoBanker is a virtual world where you can buy
real world objects with virtual money.
The objects are:
 The big nothing (can be delivered in an empty
envelope)
Hot air (no guarantee it’s still hot in case you
want it delivered)
Sandcorns: Can be delivered, but standard
shipping and handling costs apply
In many cases you will not want the objects
delivered to you but you will sell them back to
us, if possible at a higher price. If you believe
that the prices will go down, then you can borrow
them from us and sell the object, although you
don’t even have it. That way you can make a profit
even when prices go down because you will buy back
the borrowed objects at a lower price than at the
price you sold them (remember always buy low and
sell high). More to this in the section below
called “short selling”.
You can always only buy or sell one object at a
time and you can only buy or sell it to
BuyTheNothing.com. So it’s not like a trading
platform, where people can buy and sell objects to
each other. On PsychoBanker you can only buy and
sell from and to PsychoBanker – so it’s more like
a one-stop shop where we take back the objects
that you buy from us at a price which is
determined by the following rule:
Pricing of the objects
Whenever somebody purchases an object from us, we
will increase the price at a percentage, which is
dependent on the object (usually around 2.5%). If
somebody sells an object, the price will be
reduced by the same percentage. The change will
always take place right before the purchase or the
sale. This means you need to be careful. If you
buy an object, you should wait until the price
increases as you will make a small loss otherwise,
because in buying the object you move up the price
but if you sell it right away you will only be
able to sell it at a lower price. The same applies
for a short sale. If you sell the object short you
should wait until prices go down a bit before you
reduce your position to make a profit.
Why would anybody want to buy the Nothing of the
Hot air?
It is important to understand that the whole game
is about psychology since there is only a virtual
value in the goods that are sold on PsychoBanker.
So you should only buy because you think that
others will buy, while they will only buy when
they think that you will buy because they think
that you think that they will buy. That’s called
“game theory”. This of course leaves open to a lot
of tactics that you can make others believe that
you will buy in showing them that you are buying.
You should also talk in the chat with other people
and see what they think that you think that they
think. There might also be a panic and everybody
will want to sell which will cause even more
panic. So you need to make sure you are the first
one to move. If you manage to become the trend
setter and move the markets, the chances you make
a profit are high.
Another way to make money is to read about chart
trading and try to follow the trend. On the
internet there is a lot of literature about chart
trading, finding patterns and also following the
trend. While not everybody believes in these
strategies, a lot of people claim to have made a
lot of money with it. If you think this is
something for you, you should explore it further
on the internet.
Exchanging PsychoDollars to US Dollars
The current exchange rate from PsychoDollars to US
Dollars is 1:100 and unless there are any
portfolios with a negative balances (which is
theoretically impossible, and we’ll do everything
to avoid it), the exchange rate will remain.
You can only withdraw money, if all your positions
are at 0.
The different objects
Each of the 3 objects that are sold on
PsychoBanker have their peculiarities:
The Big Nothing (2.5% spread)
The big nothing is probably the most popular item
on PsychoBanker even though the name is highly
misleading. The big nothing is in fact worth much
more than nothing and its value can potentially be
unlimited.
The big nothing has a spread of 2.5%. This means
if somebody buys or sells, the price goes up or
down by 2.5%.
Hot air (1.0% spread)
Hot air is the second object we are selling. If
you want it delivered to your home we put hot air
from our office rooms into an envelope and send it
to you (no shipping costs worldwide). However we
cannot guarantee that the air is still hot when it
arrives at your place, so it may be more
profitable for you to simply sell it back to us at
a higher price if you can. We’re happy to do that
if prices have moved up because other people also
like our hot air.
When somebody buys or sells hot air the price only
moves by 1%. This means it’s less risky to lose
money, but you can also win less than in other
objects which have a higher spread. If you just
buy and sell it right away, you will lose less
than in objects with a higher spread.
Sandcorns (5.0% spread)
Sandcorns are the most volatile assets. If
somebody buys, the price goes up 5% right away.
You can potentially make a huge profit on them
very quickly, but there is also an increase danger
of losing PsychoDollars with it as prices can move
down equally quickly.
Selling short (borrowing objects from us to sell
them and make a profit when prices go down)
While PsychoBanker is clearly not a stock market,
it does have some similarities. Prices will be
governed by greed and fear. I can be expected that
prices will go up very quickly because everybody
want so to buy early. People will want to make
more and more profit. But at some point, there
will be somebody who sells and prices will be
reduced. It is possible that other people get
scared and will want to sell as well so prices
will go down even quicker. If you see this coming,
you can sell the object short. This means you
first have to reduce the position to 0 and then
press the “sell short” button.
The red bar below the short sale button will
indicate how much more you can sell short.
Depending on how much cash you still have, you can
sell more or less. But be careful. Selling short
can be very dangerous as you are lending objects
from us. If we see that prices go up (which means
you make a loss) and we think you have no longer
enough PsychoDollars on your account, we may
simply take back our objects that we were lending
to you at the current price. This is necessary as
you might end up with a negative total balance
otherwise. Imagine if you sold an object at 1 and
the price suddenly goes up to 1000. Then you would
need the cash to buy it at 1000. If you have that
in your account, we are fine with it, but if you
don’t, we’ll want it back before it’s too late.
The progress bar below the short sale button will
indicate how much more capacity you have. If it
gets red all the way through, we’ll probably take
it back from you and you’ll make a loss.
Generally it’s a good strategy to sell short only
a small amount and if you see that prices move
back up, you should reduce your position fairly
quickly, that way you can avoid big losses.
In addition to your own restrictions how much you
can sell short, there is also a restriction on
each object how much we are willing to borrow. For
example we won’t borrow any objects if nobody has
bought them yet. We only borrow a maximum of 25%
of the objects that have been bought from us. This
number may change without notice but it won’t
affect you if you have already borrowed something
from us, so you don’t need to worry about it.
Some thoughts on strategy
As always, a good strategy will take some time to
develop. It’s best to first observe the different
players and see what they are doing. Only in a
second step you should jump in to buy or sell the
different objects.
Be aware that it’s all about psychology and that
if you think that you know what you think that
other people think that they think that you will
buy, you should definitely buy.
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