SM's Expert Investment Guide (With A Secret Method)

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SM's Expert Investment Guide (With A Secret Method)

Post by mypet tr0ll on 15/10/2012, 8:07 am

Contents

 1.0 Introduction
 2.0 Websites
 -2.1 GeUpdater
 -2.2 Grand Exchange Central
 -2.3 Official GE Website
 3.0 Levels of a Graph
 -3.1 Support Levels
 -3.2 Resistance Levels
 4.0 Prices
 -4.1 Over mid
 -4.2 Under Mid
 -4.3 Using the trading prices to our advantage
 5.0 Buying/selling Stock
 -5.1 Limits
 -5.2 Buying your stock
 -5.3 Selling your stock
 6.0 Graph Trends (advanced starts)
 - Up trend
 - Down Trend
 7.0 Patterns
 - When support and resistance levels meet
 8.0 Indicators
 - An increase of a decrease
 - A Decrease of an Increase
 9.0 Previous Movement
 - Following previous patterns
 10.0 Drawing trend lines (expert starts)
 11.0 Trend advantages
 - Buying the dip of up trends
 12.0 The secret method
 - Swing trading
 13.0 Conclusion  

1.0 Introduction

Hi everyone, in this guide I will explain how to make money via trading off the low and high point of a trend. This is called "Swing trading" and is uncommon in the runescape community. It is quite common in the real stock market, but not many people know about it "RS-Wise". Also, you will see the stuff from the older guides in here. This is for you guys to read up.

To fully understand this guide, you will need to have mastered the other arts of merchanting (flipping, investing, manipulating, inactive flipping etc etc) as it is quite difficult to understand otherwise.

I'll also teach you how to draw trend lines as well. Let's get the guide underway.

2.0 Websites

To find your graphs, you need to use a website. There are many good websites out there, but I and many others tend to use these three. These three are the most accurate of all the websites and in my opinion, the easiest to read.

2.1 GeUpdater

 GeUpdater Website(Clickable)

This website has graphs that date back for a very long time. It is the most advanced of all the graphs. It also has a handy tool up at the top right corner of the website which shows you when the GE was last updated. I personally use this one over the other two listed. Although, this website is known to be a bit behind the other two in updates.

Make sure you are using the yellow line for your graph reading.

2.2 Grand Exchange Central

Grand Exchange Central website (Clickable)

This website has the most accurate graphs. I check this one after I use GeUpdater to make sure that I am 100% correct about my findings. This website is also good because it gives readings on how specific parts of the market are going each day. It also gives an update on how the whole market is going each day (whether it is crashing, rising or remaining stable). This is all found on the left hand side of the website.

Make sure you are looking at the green line at all times.

2.3 Official GE Website

Official GE Website (Clickable)

This website is the website that is updated first. As soon as the GE updates, this is updated. This is the most reliable website as it is run by Jagex themselves, whilst the others are run by other people. It lists an item of the week, this is generally an item that is fluctuating alot. It is also useful to have the price drops, price rises and most traded items down the bottom of the website. If you are looking for an investment, check the items in the price drops category as what goes down, must come up.

Make sure you are looking at the orange line at all times.

2.4 Merchz

Merchz Website (Clickable)

This website is made by high ranking members of smokin mils. The graphs are similar to those of GEC and are more accurate than GEUpdater. If you have a little bit of money to spare, you can purchase "Live time" graphs which track most fc item price updates. These are great for inactive flipping and short term investing. This is probably the best thing that merchants have at the moment. I highly recommend this website.



3.0 Levels of a graph

A graph has different types of levels along the top and bottom of it's current price fluctuation. The two main ones are - Support and Resistance Levels. This is what we use to pick our investments. Before I go into what they are, I'll give you a brief description of what they do. In real life, if we are in our house and thrown a ball at the ground, it will rise up and hit the roof. Once it hits the roof, it will begin to fall back to the ground and once it reaches the ground it will then again raise back up.

In this example, the floor is the support level. When the ball nears the support level, it raises up to the resistance level.

In this example, the roof is the resistance level. When the balls nears the resistance levels, it begins to fall back down to the support level.

3.1 Support levels

Support levels are in all essence, the floor of the item. It acts as an invisible barrier, stopping the item from falling past a certain price. Support levels are on every graph, in different places. We an investers, aim to buy when an item is nearing it's support level.

When an item's price gets close to a support level, it will start to rise in price. It's sort of like a repellent, when the price nears the support level, it repels away and moves up in price.

Here are a few examples. The blue line that I have drawn is the support level.

Spoiler:
In this example I have drawn in the support level.

Spoiler:

Spoiler:

Using the support level, we can essentially predict when an item is going to turn around. By taking advantage of this, we can buy just before it reaches the support level and then sell when it reaches the resistance level. This is how 100's people make there money on the grand exchange!

3.2 Resistance Levels

Resistance levels are in all essence, the roof of the item. Whenever the items price nears the resistance level, it turns around and starts falling back to the support level. It acts as an invisible roof, to stop the item rising too high. Using the resistance level, we can predict when the item is going to start to fall in price. We as investers, use the resistance level to know when to dump our stock.

Once again, it works the same as the support level. It acts as a repellent to the price of the item. When the item nears the resistance level, it repels and start falling back to the support level.

Here are a few examples;

The red line is the resistance level and the blue line is the support level.

Spoiler:
In this graph, I can predict where the item is going due to the support and resistance level. This gives me the edge over other merchants and I can buy the item just before it starts to rise.

Spoiler:
In this graph, we can see that the item will raise in the next update because it is nearing the support level. Notice at the top of the graph, the resistance level keeps sending the price back down.

Spoiler:
As you can see, in this graph the item is nearing the resistance level and should fall in price the next update. This is how we would know to dump our stock.

Using the resistance level, we can predict when the item is going to start falling in price. This is an essential piece of knowledge for every merchant. It also gives us an estimated profit in each investment. This is found by the gap in the price between the support and resistance level.

4.0 Prices

The Runescape market revolves around what the item is being bought/sold at when the GE updates. For example, the mid price of a  law rune is 200gp. They are currently being bought and sold at 204gp-207gp. In the next update, they will rise in price. We check the prices the same way we do when we are flipping. (Buying for 10% over mid, selling for 10% under mid)

4.1 Over mid

When an item is trading(buying/selling) over mid, it means that there is more demand then supply for the item. This could be due to a new update or something effecting the market of the item(support/resistance levels). This means that the item will rise in price the next time the GE updates.

4.2 Under Mid

When an item is trading(buying/selling) under mid, it means that there is more supply then demand for the item. This could be due to a new item that is better than this item, or something that is effecting the market of the item(support/resistance levels). This means that the item will fall in price the next time that the GE updates.

4.3 Using this to our advantage

When you find an item with a good graph, you could be too late to invest into. If the item is already raising in price, it is highly possible that is already trading for a price way over market.

Before you invest into any item, make sure you are not buying them for over market price! Try and buy the item before it starts raising in price. This is a handy tip for merchanting and it essentially makes room for a lot more profit!

5.0 Buying/Selling Stock

When buying/selling we need to do it in a way so that we don't effect the market of the item too much. There is a limit for how much of an item you can buy every four hours, but there isn't one on how much we sell. We need to be VERY careful when selling to make sure that we don't sell it all in one go, otherwise we will make the price of the item drop because of the overwhelming amount of items coming into play.

5.1 Limits

The grand exchange has a limit on how much of an item that you can buy every 4 hours. There is no limit of how many that you can sell. Prior to a hidden update a few days ago, you could buy the whole limit of an item, and then sell back the limit and then you could buy a whole limit again and you could keep repeating. You can no longer do this.

If you wish to find out the limits on items in the GE, please click here(Clickable).

5.2 Buying Your stock

When buying your stock, you are aiming to buy it for as low as possible. It doesn't matter how long it takes, it just has to be for as low as possible. This increases your profits by a large amount.

You have to take into effect the limit on the item every four hours. If you had 100m, and found a good looking investment for dragon chain and a good looking investment for rune scimitars, you wouldn't buy the rune scimitars because you would only be buying 100 of them every hour, and with 100m, the room for profit there is very low. But on the other hand, the dragon chain has a limit of 10 and you will be using up 40% of your cashpile on one limit. The room for profit here is a lot larger.

You have to think about how much stock you want of the item, if you wanted 100 whips, leave an offer in for 100 whips at your set price. 10 of them will buy every four hours until the offer is completed.

5.3 Selling your stock

When selling your stock, you are aiming to sell it for as high as possible. It doesn't matter how long it takes, it just has to for as high as possible. This increases your profits.

Do not sell all of your stock straight away, this makes the market crash and only a little bit of your stock will sell. You will then be left with your item, and no one wants to buy it.

Sell it off in small batches, if possible, sell it on the street. You just have to remember to not sell it all in one go. This will RUIN your investment.

ADVANCED STARTS HERE _________________________________


6.0 Graph Trends

When an item is following a certain rise/fall for a large amount of time, the item is following a trend. There is two types of graph trends, one being a up trend, the other a down trend.

It is best not to invest into a trend, unless the trend is broken.

6.1 Up trend

When an item is steadily raising in price, with no signs of stopping, this is known as an up trend. An up trend can be used to your advantage in many ways.

It often makes a good investment, but just remember, what goes up, must come down. Most advanced merchanters do not invest into trends, they wait for a dip or a low point of the item before they buy into it.

If you see an up trend in a graph, it is generally a good idea to overnight flip this item. This will be the safest Item that you could overnight flip.

Here are a few examples;

Spoiler:
Spoiler:

6.2 Down trend

A down trend is the complete opposite of an up trend.

When an item is steadily falling in price, this is a down trend.

A down trend is a graph that you should definitely be watching. Most merchants watch item's that have a down trend until the graph shows a sign or indicator that it is going to be rising shortly. These graphs are good investment opportunities once they show a sign that they will be rising.

Do not overnight flip this item, chances are that the margins and price will drop dramatically on you if you decide to do it.

These are actually really good items to active flip. Most people turn away from items that are falling in price, just make sure you are actively watching what you are doing at all times.

Here are a few examples;

Spoiler:
Spoiler:
Spoiler:


7.0 Patterns

When a graph follows a certain pattern of acts a certain way, we can take advantage of it with these patterns.

7.1 When Support and Resistance Levels Meet

As you know, support and resistance levels are along the top and bottom of the price fluctuation of our item. They are generally a fair amount apart, and they act like magnets that bounce off each other.

But, in some cases, they will meet.

When the support and resistance levels meet, there is always going to be a massive price change. It could either be up or down in price, but there will always be a drastic price change after every time the support and resistance levels meet.

This is always a GREAT investment. If you check three or four days after the support and resistance levels meet, you can see if it is either going to be falling in price or raising in price. If has risen for the past three-four days, that should be a indicator to buy into your stock. If it has fallen in the three-four days that you have been watching it, then you should keep watching the item until it shows an indicator that it will turn around and start rising.

Generally, after the resistance and support levels meet, the graph turns into an up or down trend. We can tell what it is going to be by using the same method as what I described above.

Here is an example of the support and resistance levels meeting;
Spoiler:

8.0 Indicators

Indicators are useful to identify when an item is going to start a fall or raise in price. It is also useful to identify when a trend will be broken.

8.1 An Increase of a Decrease

When an item is falling in price, it will be falling at a certain rate. When the amount that it is falling each day shortens, that is an indicator that the price will be turning around soon. I'll use an example to help describe this;

An item is falling 3% each update on the GE. The next update that happened, it only fell 2.5%. The next update after that, it only fell 1.5%. The next update it only fell .5%. The next update it rose .5%.

We can use this method to help us identify the best time to buy and sell our stock.

Here is an example of the method;

Spoiler:

8.2 A Decrease of an Increase

When an item is raising in price, it will be raising in price at a certain rate. When the amount that it is rising each day shortens, that is an indicator that the price will be turning around soon. I'll use an example to help describe this.

An item is rising 3% each update on the GE. The next update that happened, it only rose 2.5%. The next update after that, it only rose 1.5%. The next update it only rose .5%. The next update it fell .5%.

It is the same method as the Increase of a decrease and works exactly the same. It is a great way to predict when to sell and buy.

Here is an example of this method;

Spoiler:

9.0 Previous Movement

When a graph acts a way in the past, chances are that it will do the same thing again if the same pattern pops up.

9.1 Following Previous Patterns

If you notice a pattern that is at the current point of your graph and this same pattern has happened before, chances are that it will act the same way that it did last time with that pattern.

We can use this method to buy into our item at exactly the right time to completely maximise our profit.

The best way this is described is through examples, so here are a few;

Spoiler:
As you can see, each time this exact pattern has occurred, it has risen in price quite alot, so it would be smart to buy into this item.
Spoiler:
As you can where I have drawn the markings, the graph has done this before. Chances are that the graph will behave in the same way and rise again.

10.0 Drawing trend lines (EXPERT STARTS HERE)

A trend line is either one of two things;

A. Two lines, across the support and resistance level that are a LOBF (Line of Best Fit). You will see this option more often then option B as it is easier to draw in.

B. One line, that essentially goes in between the support and resistance levels and acts (sort of) like a average price line. It is also a LOBF.

I'll start off with how to draw in trend lines for option A; Take any graph and take a screenshot of it. Open it up in paint and get the line tool ready to make some lines. Draw a blue line across the support level and a red line over the resistance level.



As you can see in the example above I have drawn in trend lines using option A and have succesfully identified a down trend.

Now onto option B;

Do the same thing that you did in terms of taking a screenshot and getting the line tool ready.

Now, draw a line inbetween the support and resistance levels. If it makes it easier for you, draw in the support and resistance levels before hand, and then draw a "GREEN" line in between the two levels.



As you can see, I have succesfully added in a green line to use as trend lines and have marked it straight inbetween the support and resistance levels.

It's handy to have all three lines as it gives us indicators for item buys and sells and what not.

Now that you know how to draw trend lines, i'll move on.

11.0 Up Trend Advantages

Once we have successfully identified ourselves an up-trend, we would more than likely invest. Investing in trends is far more profitable then any other form of investments as you can continue stocking up and increasing your profits. Trends have countless possibilities and we can do almost anything with them. I'll show you one handy tip that I use to increase my profits whilst invested in an up-trend.

11.1 Buying the dip of an Up Trend

So, take this as an example.

I have just successfully identified an up-trend and am ready to invest. I have now invested a fair size of my money into this item. I currently don't have as many of the item as I want too and I want to get more but the price is already rising.

Basically, an up-trend never just goes straight up. It will have many dips and downs but in the end it will end up going up in price.

When an up-trend is rising in price, it will quite usually have a drop in price for short periods of time. In the method that I use, I want to continue buying more stock whenever this happens.



In that example, I have shown the trend lines drawn, with me identifying an up-trend and have used the purple lines as the indicator to when I have bought more stock.

When the item is at these prices, the price of the item is generally a lot lower, so we can captialize on this and buy more stock at such a low price. This is much more profitable then buying constantly whilst the item is still raising in price.

This is just one of the sneaky tricks we can use with trends.

12.0 The Secret method

A very un-common form of merchanting is known as "Swing Trading". I bet a LOT of you do not even know what this is, let alone even heard the word before.

It's a very simple procedure, yet not many people know about it. It's extremely profitable with a VERY low risk.

As long as you understand everything else, this will be easy for you.

12.1 Swing Trading

The whole concept of swing trading revolves around the simply procedure of buying when it nears the support level and selling when it nears the resistance level.

What we do is, ride along an up or down trend simply buying and selling at each support/resistance level. These are short, 1-2 day investments that are very profitable with barely any risk.

I'll show you a quick example of an up-trend where I have bought and sold along it without fully investing in the up-trend.



In this example, I would be buying my item on the blue part and selling it on the red part.

You guys should be able to identify that up-trend and you could easily buy and sell at those resistance/support levels.

Here is another example of what you can do with swing trading using down trends.



Usually, we don't invest in down trends, but as you can see, by using swing trading we are clearly able to make profit from that item. I have identified that price as a low price and have bought my item. I have predicted the price of that item in the coming days and was successful.

I was able to successfully make money using a DOWN TREND. You barely ever see this as they are something that you'd overlook as an investor.

As you can probably already see, this is really easy to follow and is an easy way to make money. I can't really explain this method any more indepth as it is extremely simple.

13.0 Conclusion

This guide is one of the biggest guides I have ever written.

It took a very long time.

I hope you guys take lots of information from this and put it to good use. All of this can make you a billionaire in runescape with basically no effort.

Swing trading is something that we want to keep secret. Don't spread this guide around and keep it to us tier 4 members of SM.

Thanks everyone.


Last edited by mypet tr0ll on 16/10/2012, 12:02 am; edited 1 time in total
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by mypet tr0ll on 15/10/2012, 8:08 am

I will keep this guide up-to-date. I have still got a little bit more to edit. Thought I'd get it out there for you guys though now Smile

Thanks.
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Julij2 on 15/10/2012, 9:13 am

This guide is definitely the best investment guide I've ever seen.

+rep is not enough but it's the best I can do atm Smile
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Kitty on 15/10/2012, 12:05 pm

Very good job mypet Smile

+rep, you deserve it cat
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Drakan on 15/10/2012, 11:00 pm

Thanks mypet, and Kitty for the guide!

+rep to you guys!

Also Why isn't Merchz a good site for graph reading, you didn't mention it. Razz
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by mypet tr0ll on 16/10/2012, 12:03 am

Drakan wrote:Thanks mypet, and Kitty for the guide!

+rep to you guys!

Also Why isn't Merchz a good site for graph reading, you didn't mention it. Razz

Oh! My bad Razz

I have edited it in now Very Happy
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Tuff Tiga on 16/10/2012, 12:06 am

Good job on this mypet. Hopefully a lot learn from this Very Happy.

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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Woah Rand on 16/10/2012, 12:09 am

I knew alot of this stuff as a mentee but there was some stuff i was unclear abd this is in my top 5 of guides ever on this site so a big old rep for u troll
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Sweex on 19/10/2012, 11:31 am

Wow Mypet, you've really outdone yourself here!
Superb effort Smile
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by tzhaar125 on 20/10/2012, 8:02 pm

the very best guide ever written, wow. a big congratulations +rep for sure
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Daxaal on 2/11/2012, 9:59 pm

+ rep
Amazing guide now forum members have something useful to look forward to when they reach tier 4
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by 320P on 6/1/2014, 10:07 am

wow..... so helpful, many thanks Very Happy
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by Sioux on 23/12/2014, 5:31 pm

I mostly like about this guide that you give a diversification of options and a classification of beginners, advanced and experts +rep Very Happy
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Re: SM's Expert Investment Guide (With A Secret Method)

Post by KimiiShiima on 14/10/2015, 7:13 pm

Wow this was an incredible guide, and very well written. I am extremely impressed. This has helped me understand a lot of the methods that i just could not get a grasp on. Being very new to flipping/merching I know this is going to help me tremendously when it comes to picking the right times to buy and sell my stock.

Thank you so much for putting all your time, energy, and thoughts into this guide to help us out. I hope you know that it will be utilized to its fullest and put to good use. And hopefully it will help me achieve my goals of reaching my first Bill. in RuneScape.

10/10 +rep Wish I could give more

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