Making money with the GE

This is the first part in a four part series on GE trading.  When the Grand Exchange first opened in Runescape, it ushered in a whole new era of trading.  No more sitting in Fally W2 and hoping for items you needed, or begging in banks for some obscure item.  It also opened up some huge opportunities for trading and new and more effective ways of making gold in Runescape.

In the first of four posts on making GP with the GE, I will outline some effective trading strategies (Fundamental, technical and speculative), and in the last I will debunk some of the poor strategies (like buy outs for example).  If, after you are done reading fee free to post any questions you may have.  There is also a forum over at The Grand Exchange (Thegrandexchange.com) where you can register and ask specific questions about trading and the various methods I will outline here.

Part I – Fundamental Trading

First off, I will start by saying that fundy trading is the easiest and fastest way to make money off the GE.  It is fairly straightforward, and is based on real stock trading methods.  The kind of trade you do also determines which items you will trade.

There are three prerequisites for items to determine if they are a good thing to buy as a fundy trade. They are:

1.  The item must be traded in high volume (Anything in the top 100 most traded items list is good)

2.  The item needs to be used up in the process of skilling (People use them up in large quantities)

3.  The price graph must be relatively straight (little volatility)

The goal with a fundamental trade is a 5% profit.  In general, buying at 2.5% below med and selling at 2.5% above will accomplish that.  Done on a consistent basis, you will see your money double every 14 trades.  (See the rule of 72 for further study of the reasons for that).

Why high volume?  You need lots of buyers and sellers.  Items like gold leaf, for example, are used in the ‘value chain’ of making gilded items in construction, but there are so few traded on the GE that it is nearly impossible to make money off them.  Teak planks on the other hand are traded in huge volumes, as well as being used far more frequently in skilling.

Finally, why a straight line?  You don’t want to choose an item that might jump down after you purchase it.  Coal is another example.  It is used up in large quantities, and is the 19th most traded item, with 97 million chunks of coal trading hands yesterday.  With a 4 hour limit of 10k coal, it is impossible to manipulate, as it is not a matter of purchasing power or GP at that point.  You would need a clan 20,000 members strong buying and selling 10k coal each to even make a dent in the price, and no one has anywhere near those numbers, not to mention all of the coal miners would keep pumping cheap coal into the GE to offset any attempted price increase.

An example of value chain for Rune Essence:  Rune ess is mined, air runes are crafted, water blast is used to kill an NPC.  The final product is a drop that you can either bank or sell (or leave on the ground).  Either way the ess is converted and finally used up in the process.  Why does it remain flat?  As rune crafters skill, they buy rune ess when it is cheap and mine it when it is expensive, keeping the price relatively stable.

As a beginner, once you go through the initial work of finding some items, you can continue to trade them without constant checking of the prices in the GE, making fundy trading ideal for those who either don’t have the time or the inclination to check the market regularly.  90% Of my trades are fundy trades, as I can pull a 5% profit in 5-6 hours.  That beats the pants off the return you would get with a buyout clan that only makes 5% every time the GE updates (26-30 hours).

This post is getting long, but I wanted to mention that this kind of trading is the basis of what Sparhawk is talking about on his blog the Runescape Money Guild.  But in his price breakdowns, he does not seem to address the fluctuations in the daily GE prices, so you can clearly see a lot of out of date prices.  My advice there is to have a calculator next to your PD and just do the calculation manually every time.  Mid price x 0.975 for 2.5% below buy price then mid x 1.025 for 2.5% above sell price.

PS thanks for the mention last week Merch.  If you don’t follow Merch Gwyar’s blog, here is a link.  Vaskor over at the Runescape Reader’s Digest picked up that post, and the link from Merch’s post made for my busiest day this month.  Thanks Vaskor and Merch Gwyar!

Pure Ess = Buy Now

This is just a tip for the regular readers.  Take a look at this graph:

You can see where pure ess bottomed out at 122 on Jan 25, and it is almost there again.  It will probably go down at least one more day, but because huge amounts are used in the chain of production, and we have no more ess farmers to supply us with a cheap source of ess, the price can’t go much lower than it is today.

I came across the graph when asked in the Advitica about it.  In general it is a decent money making trade, and I have noticed that it tends to go down on Sunday night and up again on Mondays, so I took a look.  I have not seen any better time to buy than now.  Even if it goes down for two days, it should head right back up to the 30 day average of 131 within 4-5 days.

I was able to buy 25,000 at the min of 120 almost instantly. Holding it for 5 days and selling at 130 will net me a quarter mil in profit.  Not bad at all.  The beauty of this tip is that it pretty much sells itself, and pure ess, the #2 traded item on the GE, with 407million sold a day, is impossible to manipulate while being easy to predict.  (max of 25k every 4 hours would need over 32,000 players to buy and sell 25k each every 4 hours to have any effect, and that is not going to happen).

Since past performance is the best predictor of future performance, I say start buyin’!

Rune HQ = FAIL

**RANT ALERT**

I got an interesting email from the RHQInn Staff over at the Rune HQ forum.  It has to be the most abrupt and rude email I have received in quite a while.  Here it for you to judge yourself:

Dear, rs

Due to your inactivity, or lack of posts, you – and all you topics, posts, private messages etc, have been deleted from our forum.

I have to say Rune HQ can go fuck themselves (see pic above).  I will not be back.  Punctuation aside, what is the point of letting me know that I have been deleted, in fact how would you go about deleting someone?

So I don’t post very often there.  I do visit the site a few times a week, and I did have a few PMs that would have been nice to back up.  Head to head, RuneHQ does beat me in SEO for Runescape related web sites and guides, but give me a week, and this post is going to be right up there.

I would have to venture that a lot of RuneHQ’s advertising is pay per impression.  Now with that in mind, wouldn’t a gentle reminder calling people back to the site have been more appropriate?  Something to the effect of, “Hey, we haven’t heard from you in a while, how about coming back and checking out all of the new updates…”

Mint Cake Q & A, aka So long Mints

Mint cakes, if you had not heard of them are a semi rare item that sell for well over their GE value.  They are literally unavailable in the GE, and can only be traded in W2 in the south west corner of the GE.

1.  Why are they semi rare?

You can only get one after completing Path of Glouphrie.  They are also available from doing Gnome deliveries, but they were an extremely rare tip.

2.  Why the huge demand?

A few reasons:  (1) Mint cakes made high stakes gambling possible again.  With a GE value of 20k and a street value of 8mil, you could effectively stake for 24 mil again.  (2)  Mint cakes made it easier to trade RS gold for real currency.  I sell you a mint for 20k, you sell it on the street for 8mil (you need junk to make up that price, but that was the easy part).  (3)  They were hard to get.

3.  What happened and why so long?

Yesterday’s update increased the drop frequency of mints as tips in the Gnome Delivery mini game.

4.  How do I get a mint?

If you have finished Path of Glouphrie, you can take a player made Tangled Toads legs to Longramble, a Gnome in the Poison Waste.  Here is a video of how to do it.

5.  I got a mint for somebody else.  Was I scammed?

Yes you were.  It was a common way to cheat someone out of a few mil.

6.  I have a mint.  What do I do now?

Sell it.  Sell it asap.  The market was volatile before, going from 2mil to 8 mil each within a week.  I predict they will only go down.  How do you generate that much junk?  Vials.  60k for 350k worth of junk (blogged about it here).  Do that 3 days and you have a mil worth of junk.  You can also buy crashing items for low, and sell them at mid for junk.  It is only a 5% profit, but 5% of 8mil is still 400k.  Not a bad addition if you have other junk to sell along side and need something to make up the difference.  Any unsellable products you have sitting in the bank from skilling work as well.  Be creative.  A mil in junk can be had pretty quickly.

I am off to do the new quest.  Happy questing~!

Victory Coffee

In a marginally RS related thread, I came across this today in my blog roll.  I am a big fan of Mitchville.  His blog is filled with some really good political commentary and interspersed with stuff like this:

Here is the OP if you wanted to see the commentary there.  Be warned, he is not an Obama fan if you go and poke around.  That is all I will say about it.

So… Why scantily clad woman in a cat suit in the RS Economist Blog you ask?  Because she is wearing a low cut shirt with cat ears!  Do I need another reason?  No seriously though.  You guys must know I am a bit older than the average ’scaper.

There is a guy in the advitica cc who always throws up emoticons.  I can manage 3 of them, here they are: , , and .  Well, I can also make something that looks like a penis (q p and a W on the next line), but that is rarely (if ever) appropriate.  One of his favorites was what I always considered ass face.

:3

I was not the only one evidently, and someone asked him about it yesterday.  I guess it is a cat.  Well, today I can tell ya.  I will be the king of Japanese emoticons.  The novelty should end tomorrow.

Nomad…

As most of the people I talk to in cc know, the default world has been encroaching on my gaming time.  That has made it really hard to settle down for a few hours to study Nomad, so I can finally beat him.  He has owned me quite a few times now, but I haven’t made an attempt in a week.

The plan is to head back down with broad bolts, they hit amazingly high against him by the way, and an invent of monk fish to perfect what I am calling the “Run behind the pillar to avoid the 75 hit” trick.  There was once I would have had him if I had not just takes 150 points in damage by standing in the middle of the grenades, so the key to winning the fight will be conserving HP and resources.

Any tricks or tips that you used outside of the ordinary?

GE Warlord Short Trouble Brewing Guide

Hi all. I am writing this for today’s clan event (hey Slayaz), but it should help anyone trying to organize an fun and effective game of Trouble Brewing.  If you aren’t part of Slayaz, hop into slayalot jr’s cc and join us if you want.

To start off with, the primary goal of the game is to have fun, and the secondary is of course maxing out xp and rewards. To do that we will need to take care of a few things first.

When the game starts, go directly to your respective jobs and collect ingredients. The faster you get enough ingredients, the faster rum production can begin. Keep an eye on the inventories, and help out other groups if necessary.

As soon as there is a decent stock built up (5 or 10 minutes into the game), grab as many buckets as you can and fill them with water. The bucket spawn is easy to find and the water comes from the pump. Empty the buckets into the corresponding hopper. This is the simplest job and the easiest to maximize your pieces of eight. Adding ingredients will maximize your pieces of eight, so you don’t need to add over 100 buckets of water, but be sure that your total added ingredients is up there.

Moving on, split into teams for rum ingredients.

Colored flowers/water: Easily one of the most important tasks. This needs 2-3 people on it. Since you can only hold 5 at a time, but can hold more if they are traded to you, everyone needs to pick then trade to a designated person. After you are full, dump the flowers into the kettle, and then use bowls on it for colored water. Take those upstairs to the corresponding hopper on the second floor

Sweetgrubs: Grab some meat from your base and use it on the mounds around the area. If you get a swarm, then run away. Otherwise use meat on it until it collapses, and add your collected grubs to the corresponding hopper on the 2nd floor.

Scrapey Bark: If you want WC xp, then this job is for you. It is easy to collect 100 barks, so you can avoid collection 100 buckets of water if you chose this task. Find a scrapy bark tree, cut it, and then use a knife on the logs. Dump the bark into corresponding upstairs.

Bitternuts: One of my favorite tasks, and the most complicated. You need to get a few bowls of colored water, then head to the center island and catch a monkey, you can have 3 at a time. Dye the monkey with the colored water to mark his as your team mate, and then use the monkey with a bitternut tree. It will jump up and throw down a nut to you. (Unless there is another one already there, in which case it will fight). M’speak ammy can be used here to encourage your monkey.

Tending the boiler: This job brings the whole team together. Keep the fires lit, wood added to them, and the pipes repaired.

Things to bring: An axe (your best), m’speak amulet, Duel ring, boots of lightness, spottier or spotted cape, and penance gloves. None of those items are 100% necessary though, so if you don’t have them don’t worry. I don’t recommend armor or any other equipment. It is heavier and will only make your run not last as long (but feel free to wear anything you want to show off).

Merry Christmas

I hope everyone got what they were looking for this Christmas.  It looks like the folks at Jagex Towers were a bit pre-occupied for this year’s Christmas event.  I know I was not the only person who was frustrated at the poorly planned and executed event.

Sorry for the dearth of posts lately.  I have really been concentrating on slayer.  I needed 75 att and str so getting slayer up at the same time seemed the natural choice.  I really do like cannoning the ice trolls.  If you are creative, you can still find the old Truthscape guide, that with minor updates for today’s Runescape, still make it a profitable trip.

I now have nearly 4000 charms saved up.  It looks like these last 3 levels will push me into the 100s for my combat level, so it might just be a good time to get that summoning up.  I also have prayer on the list of question marks.  The 450k bonus would be a great addition to 75 prayer, but that is 12 levels away.  We will see.

Runescape Forums

I post on a few forums around, and am starting to see some real differences in the type of members there. Lately I have seen a lot of traffic from Sal’s.   Thanks Sals!  I assume it is from some of my comments there in both the forums and on other blogs.  Here are just a few of the recent reactions and my take on them.

Sals:

This showed up in my PM in box yesterday from another member we will call Kit:

“Thanks for that info on Merch Gwyar’s blog. That was really useful and I’m looking forward to putting it to some use on RS.

Thanks again smile”

Thanks for the kind words Kit!

Runescoop:

I have the QP cape, got it at level 62.  I enjoy the challenge of the boss fights at the lowest level I can do them, so of course the new quest requirements made me a bit unhappy.  I have fought and beaten all of the quest bosses to date, solo’d the dagganoth kings, and killed many a KBD.  I have some weapons I can’t use, like the anchor, but I don’t mind.

I posted to that effect on a thread there at Runescoop, and sadly most of the replies were pithy knee jerk reactions.  “Train yer skillz”.  Gee, like I am not doing that already.  I have a keen sense of the obvious here guys.  Give me a break.  I am proud that I did Troll Romance with a combat level of 34.  It was a challenge.  Knowing Jagex, the Blood Runs Deep boss will be equally as easy to put down as the last hell hound I killed with my current stats as it would with 75 Att and Str.

One last thing, Google someone before you insult them. If their PageRank and SEO beats yours, recognize that the public will see and believe what they say first and foremost.

The Grand Exchange:

Thanks for the recent clan chat promotion Glen.  When can I get another rank?

A member of this group takes the cake for asinine behavior though.  I got my first physical threats in that cc last week.  Interestingly, I haven’t seen d darknight1 around since then.  I hope he was banned.  He wants to hurt me for some reason.  Ddarknight1 – You win RS Economist the douche bag of the week award.  Here is the screenie for your entertainment:

On a lighter note, I did want to say Congratulations to Gym Bag Boy’s 99 Agility.  I was in the Brimhaven Agility arena this morning at the right time, only to realize that I had the day wrong.  Sorry I missed the big event!

That is about it for today.  Still in a bad mood over the PC melt down this week.  Just got a clue from the hell hounds while proof reading this.  Might just brighten my day.  Good ’scaping.

My PC died yesterday.  Lost a few rough drafts.  Here is the best Christmas song I have seen to date this year to tide you over until our regularly scheduled posting has resumed.