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).

Salutations,

Recently I was trading some unstrung magic bows in for cash at the Grand Exchange and I over heard a fellow member of the fine Runescape game speaking about getting a name change. I inquired as to what he meant exactly and he went on to explain that JaGex is considering implimenting a system which will allow for players to change their in-game-name. Now, we won’t be able to change the name we use to log in… but our character name will be able to be changed.

I am very interested to see how this will play out – considering that many of the popular names are either already taken/banned there may not be much room to move in terms of acquiring a new and unique name. However I am sure that somebody will find a way around this somehow.

Veritas Odium Parit

11

Most people know about the supply-and-demand-philosophy at the Grand Exchange: When there is large demand for an item, the price goes up, and if it’s not wanted, it drops. But what if RuneScape Investors joined together, buying items at high quantities, and eventually selling them? With enough gold in the market, these investors could drastically influence the G.E.

What the scenario mentioned above is called is a Merchanting Clan, or a group of investors who invest in the same thing. Many merchanting clans have millions in the market (a few clans are expected to have close to a billion) meaning that they can either crash the price of an item, or catapult it. With the exception of price-locked items due to Jagex updates, this usually works. Most merchanting clans make the Clan Name the item to buy, and say when to sell it. The only downside is that when the item is sold, the market is often flooded with so many orders that many investors cannot sell it, or lose lots of money. 

With a merchanting clan, your  prospects for making money are greatly increased. Usually, the price will increase. However, make sure you sell before the “Dump ” order comes in, or you’ll be caught in a stampede of selling. If you are interested in a clan, try “efd923″. The item to buy is posted in the Clan Name, and the clan is reasonably large. Try looking around for other clans too, and diversify your investments. But be warned: Merchant clans are NOT for the long-term; on the contrary, they usually employ a buy-one-day, sell-three-days-later technique. Forget to sell your items, and you’ll probably be left with huge profit loss when everybody in the clan does.

I am doing a series on RS pures on my blog, and since more readers is better than fewer, you get to read it here too!  I am going to edit these RS Blog articles to keep the posts at a more manageable word count, so if you want to see the whole article check out the RS Economist, but the important facts are all here.

The Prayer Beast

They are one of the most lethal killers out there, the G Maul Prayer Beast.  Before the G Maul spec nerf, they were really lethal, but still they are pretty powerful, and are starting to make a come back.

Required Skills

• Str: 50
• Att: 50
• Def: 0
• Prayer: 31

Those are the minimums you will need to be a serious threat in PvP fighting.  Minimums to wield the G Maul are 50 att and str, keep def at zero to minimize your combat lvl, and prayer at 31 for Ultimate Str.

Outfit:

1. Iron Full
2. Cape – 600gp
3. Amulet of Strength
4. Granite Maul – 130k
5. Explorer’s Ring – Lumby Achievement Diaries
6. Monk Robe Top – Prayer Guild (535gp from GE)
7. Anti-Dragon shield – King of Lumby (289gp from the GE)
8. Monk Robe Bottom – Prayer Guild (485 from the GE)
9. Safety Gloves – Stronghold of Player Safety
10. Fighting Boots – Stronghold of Security

Total outfit cost:

About 150k.  If you want to spend the time, pick up the free stuff, but it is all pretty cheap.

Inventory:

PK food and  Zammy Brews.  At the cost of <250 per dose, they offer the str and att bonus of Super pots at 1/10 the price, and prayer bonus.  They do have an HP and def penalty, but at 1 def, it doesn’t matter so gobble a fish to heal up after every shot.

Carry a rune scimmy.  Twice as fast, and hits higher than a maul.  Wound them, then pull out the maul and Quick Smash ‘em to death.

Turbo Tip:

It is easier to buy the materials for Zammy Brews and ask for an assist than it is to buy them.

Turbo here from the RS Economist blog.  Some of you have noticed my stories doubled up, and yes that is the case.  Any guest posting I do, I do copy to my own blog as well.  I don’t post all of my stories here, so if you did like what you read, then add the RS Economist blog to your RSS.