Julij2's investment guide with medium wealth

Billious wrote:Incredibly well layed out, detailed and explained. Lovely job +rep

PS: Do you want a job ?

unagileguth wrote:This is impressive, you should request to be sticked. The most detailed guide to investments I have ever seen, +repped

Muffins wrote:I'll go through and try to find the grammatical errors I saw, to help you! Also, +rep, very impressive guide, I have also bought Bom's Investment Guide, and this is of the same calibre

Shadyfellow wrote:Extremely helpful for getting started with 50m cash stack. Thanks!

celeritas0 wrote:Very nice guide, lot of information there

Why the sideways hourglass on the second rocktail graph? Just to find where the middle was, or some other reason?

panda pl0xx wrote:i like the guide its very descriptive i actually read it all

killer02025 wrote:wow great guide Ive only glanced over it and I have already learnt something. lots of examples well laid out and very professional great work I plan on reading the whole thing when I have some free time.

I would rep if I could but I cant sorry but great guide

mypet tr0ll wrote:Ahh julij, long time no see.

Great guide mate, you've done a fabulous job. If you wanted to add more to the stocking part, you could talk about buying off the forums and other RS fansites.

I've moved it into the rated section (didn't even think I still could, lol), well deserved.

Keep it up bud

Julij2 wrote:How to invest with medium wealth

In this guide I'll speak about investing based upon graphs and not on future updates.

Investing is my favourite type of merchanting. It's great beacuse it offers decent money and the best thing
is that it can be done with almost no effort. At the very start it will be hard as there's a lot to learn
but after doing a few investments you get a hang of it.  

Why choose investing over other types of merchanting?

The main reason is that investing can be done with much less activity than other types of merchanting
(apart from inactive flipping*). At the same time it offers decent profit if done properly, not to mention the huge feeling of accomplishment after a succesful investment.

*Inactive flipping is better than investing when you invest solely on graphs (most of the time). It is also
less stressful and less risky, so if you're just a beginner in merchanting, I suggest you try inactive flipping
first. But, you have to take in consideration that after a while you'll get more experienced in investing and at later stages
investing can become more profitable than inactive flipping.

How to start?

There are a few things that can help you a lot at start:

1.Wealth

Without decent cash stack you won't go far with investing. I try to tie like 20%-30% of my money
into one investment. I suggest that your cash stack should be atleast ~100m (meaning like 20m-30m per investment)
With less money it will be harder to find good investing opportunities. I usually invest like 60m-80m per one investment,
but it can be done with less cash.

*I try to stay in that range. With the rest of the money I usually do active/inactive flipping.

2.Grand exchange sites

Probably the most important thing after wealth. I recommend next sites*:
-runescape official grand exchange site
-www.geupdater.com
-www.merchz.com
-www.grandexchangecentral.com/

*The only site I use for graph looking is merchz.com. With other sites I mainly look for items
that have a potential of becoming investment.

3.Runescape updates*

It's really important that you stay up to date with runescape updates. If you know there's going to be
barrows double drop weekend then you probably don't want to invest in barrows even if their graph
may seem like it will suddenly bounce.

*Try to stay away from investing before BTS. Sometimes you might get lucky and hit the jackpot, other times
you might lose a fortune.


4.Paint (or other drawing instruments)

Drawing on a graph is pretty important. It can help you figure out the future movement of an item.
Sometimes lines you draw look like they don’t make any sense, but I assure you that everything you draw on the graph is
more helpful than harmful.


5.Runescape membership

For some people this is self-explanatory. Investing without membership is extremely hard. I tried it a
few times a long time ago and it wasn't worth it. The market in p2p is way bigger and finding items is easier, so
p2p is incredibly important, if not necessary.

6.Merchanting log

You can learn a lot from other people's merchanting logs. Since we're dealing with investments
you should check other people's logged investments. Many times you can learn something from them and
find inspiration. Many items that have been used for investing in the past can still make great investment ideas.

Step 1: Finding the item

This is a very important step. Finding a good item is essential part of investing*.

*If you're an active flipper one of the best investment items you can use are items that you regularly flip.
You know how they work, you know their movement, you know when they buy and when they sell. You basically
know everything you should know. But make sure that before you invest, you check the graph in case the items have
a potential to rise.

At the beginning you should focus on more stable items. Those items have rises/falls which are predictable. Try to
figure exactly when they will rise, how much they will rise and when they will fall. Profit on these items isn't
great but they are a good start.

Some of these items are: certain types of runes, some pouches, jewellery...

If you really want to be safe choose an item that has a price near its alching value. The chances of an item
going below its alching value are really slim so risk of losing anything is close to zero (try regen bracelets).

Even though this graph may have quite large spikes and falls, they are one of the safest items. Their alch value is
121.2k so going below that is extremely hard. If you're a beginner you should definitely check these.


Another safe investment I would suggest is fruitfall scrolls. I used to do them all the time. They
have very predictable rises and falls and sometimes they can make plenty of money.

Going below 200gp is close to impossible due to the pouch alching value.


Now if you want to earn more money you'll have to find an item that isn't stable* as some of the
above mentioned items are. These kind of investments always bare the risk of losing money. On the other hand
they can make some really good money.

*Before you try to invest in such items you should check a few graphs by yourself and predict their movements.
This will give you some needed experience and self-confidence before trying it for real. More on graphs will be
explained later.

First of all you don't want to invest in an item that has already risen*. The reason is that the money earned from
an already rising item is just not worth the risk it bares if the item suddenly crashes.
So, by far the best items to invest are items that are falling in price**. If you stock up on them at the right time
they can make you a hefty profit.

*Unless you are 100% certain that item will keep on rising. I would also invest if the item has already risen for a really
small amount and its ge price is still around mid.

**Always check their price in ge before investing. Their price in ge might be different than shown on the graph.
Item may already have risen even though on the graph is still shown that in fact the item is falling.

I use geupdater.com for checking on items that are falling in price. You can also use grandexchangecentral
and the official runescape grand exchange site. After you have found an item just search the graph on merchz.com.

For me the next step is most important. Before I even bother testing the ge price of an item or drawing lines
on the graph I check the potential the item has. You want to check how much its graph varies, the item's limit and you
have to set the goal of how much you want to make from this investment.

It's important that you study your graph closely. Sometimes an item's graph varies very little and a
small crash can be shown as huge on the graph. On the other hand some graphs may vary a lot and
a little crash can cost you a huge amount of money.

Let's see an example. We have a spirit kyatt pouch. Its lowest price shown on graph is 12k and its highest
shown is 17k. On the other hand we have spirit graahk pouch. Its lowest price was 13k and its highest price was
15k. So 1k crash on spirit graahk pouch may seem like a huge crash while 1k crash on spirit kyatt pouch graph
doesn't seem so big compared to spirit graahk pouch crash, even though you would loose the same amount of
cash on both investments*.

As you can see the rise on spirit graahk pouch looks extremely small compared to spirit kyatt pouch.
But if you look at the graph really closely you'll see that both rises are pretty close to each other and near
the same profit can be made. The only difference is that a spirit graahk pouch is more expensive.




*Same thing happens if item is rising.

Step 2: Graphs

It's time for most important thing. Graph reading! I'll give you a few examples of graphs you may encounter
when you're dealing with flipping.

Downward trend graph:

Graph 1:


First graph I'll present is war tortoise pouch graph. As you can see the movement of graph is steady fall with a few bounces once in awhile. Your aim is to predict those bounces and invest in them*. To do that, simply draw a straight line that touches recent graph falls.

*Try to predict those bounces before that happens. If you're waiting on graph to update then you're doing it
wrong.

As you can see the line went straight through graph 24th November. That's when the bounce should happen. This wasn't the case with this graph. But it's important not to panic. As you can see the graph was still falling after that, but the bounce at the end of the graph was much higher then all the other bounces were. Even if you bought stock at that time, the profit was still there to make*.

*Remember that ge price is different than the one shown on graph.

Now check the red circle numbered 2. That's the best time you could buy your stock. I bought my stock one day after that red circle and I still managed to buy a two limits and half at ~5300gp per item which is a very good price.

Blue circle shows crossing graph line with 30-day graph line. Be careful when this happens. If this happens then item will probably drastically change its price. If it's rising it will usually go down if it's falling it will usually go up*.

*This might not be the case every time but I tend to obey this rule as I prefer not to risk too much.

Graph 2:


Second graph shows two lines. They're support and resistance levels. Item will usually stay in that ''safe'' area. If item is out of that area then you should look out as chances that it will swing into that area are very high and potential profit can be made*. This was the case in this investment.

*Before you invest you have to check if item has been a part in recent runescape updates. That might be the reason that item moves out of that ''safe'' area.

Red circle on graph two shows the best time to sell. Reason is that actual ge price with rising item is usually higher than the one shown on graph. If item is rising in ge than the graph will show that next time it updates. The problem is that graph updates are old so they're taking past prices from ge which might be different then the actual prices in ge really are when graph udpates. Meaning that graph will shown item is rising when item is actually already falling in ge.

Graph 3:


Graph three shows mage's book graph. Both lines present support and resistance levels. Red circle present the time when I bought mage's book as investment. I snatched them for 1010k and as you can see that's 90k below its mid price. I sold them at ~1086k each which is right in that ''safe'' area between support and resistance level.

Graph 4:


Graph four might be a little problem. As you can see, drawing resistance level was easy. Problem is drawing support level as there was only one little crash you can count on (assuming you're trying to predict future movement of the graph before). If something like this happens I just try to draw horizontal line to another. It still gives you good insight into graph. In this case I bought dharok's sets at ~1870k. I was one day late with this one. I sold them at ~2000k per piece which is again in the zone between support and resistance level.

Graph 5:


One graph five there's nothing much to draw. There's just one big rise and fall. In this case I just draw support level. The chances of rocktail going below that support level are really slim so it's really safe investment.

Graph 6:


It's also pretty hard to determine when to sell your stock. As shown on graph six I use the the middle price between highest point and lowest point as a guideline to determine at how much I want to sell stock. After middle price is setted I usually take ~5% from it and that's how I get my sell price*. In this case I sold them ~1190gp per piece.

*I take 5% just to make sure that my item sells. The chances of rising it back again to its highest points are very slim.

Upward trend graphs

I tend to stay away from them as they're not my favourite. They still offer some great money and most of the principles are pretty same as in downward trend graphs.

Graph 7:


Graph seven shows clean snapdragon. Graph is steadily rising over time. As you can see you still draw support and resistance levels and the principle is the same. In this case I bought clean snapdragon around mid (4096gp) and I was able to sell them at ~4400gp. Sadly I only managed to buy 1k of them as I was already too late.

Graph 8:


Graph eight shows another example of classic upward trend. As you can see bounces were easily predictable. But be careful when support and resistance levels are closing together. That usually means drastic changes in price. Usually meaning that if item is rising and this happens it will fall and if it's falling it usually means it will rise. This graph might not be the best example as dragon bones were extremely cheap for awhile (not sure why as I wasn't paying attention). I think they'll stabilize at ~2.8k per bones but we'll see.

Graph 9:


Graph nine is extremely recent investment*. All this rises and falls were easily predictable. I'd just like to point out at red circles. As you can see that everytime that 30-day graph crossed daily graph, the drastic change in item's price has occurred.

*I bought two limits of them at ~3217k and sold them at ~3363k. Not bad for only one day investment.

Graph 10:


Graph ten shows another upward trend. Here it's even better shown what happens when 30-day graph crosses daily graph. Support and resistance level are closing together so I think I'll stay from them for awhile. I bought them at ~3700gp and sold them at ~4200gp.

Stepped graphs

I do not recommend doing stepped graphs. Reason is that most of this investment can be done in a day or two. Most it took me was four days. With stepped graphs the process gets even longer and most of the time the profit it results is either lower or the same as investing in non-stepped graph items.

Even though graph is stepped I love fruitfall scrolls as they are easily predictable. You can buy more limit as demand for them is high and at the same time there's almost no risk as I never saw them falling below 200gp.



Step 3: Stocking

Since this isn't investing in updates I suggest you don't overstock on item or you'll have troubles selling
your stock. I suggest to stock on 3-4 limits, you can try up to 8 on items that move a little faster.

If you're going to overstock yourself you'll crash the item too fast (when selling). And if you're not
alone in this merch you'll be in big troubles as many other will try to sell their stocks too.
I tend to follow the rule ''less is more'' when it comes to investments*.

*In past it was possible to sell bigger stocks of an item without crashing it. At that time trade limit
was resetted meaning that for every item you sold, you were able to buy back one more. You basically flipped
the item until you had no stock left.

If item is still not rising I suggest you wait a couple of days. Buying more of it won't help too much rising
its price. Try to be patient and don't panic if item is still going down*.

*Unless you're certain it won't bounce back up. More will be explained later.

The good thing with this is that after you bought your stock you can take it away from ge and
use the the extra spot for flipping. It's still recommended that you pc your investment item once in
a while.

Step 4: Selling

This is definitely one of my least favourite parts. Selling usually requires a tad more activity than other
steps of investment process. The good part is that this is where you get your profit.

Selling at the right time is extremely hard. For that you would need regular price checks. If you have VIP
and your item is on live prices chart then you have a huge advantage.

But do not worry if you're not VIP member. I suggest you price check the item whenever you have the time to do
so. If you don't have time then try throwing in the selling offer at range in which you wanted to sell
item. Try not to set too unrealistic goals. If item has risen to 17k in last rise then that doesn't mean it
will rise to that price once again. If I'm inactive I set price under middle between last rise and last fall.
But one price check once in a while will do much better job*.

*I usually buy the stock overnight and when I wake up I do one price check. If item has risen then I sell it
if not then I usually wait for next 8 hours and then I do another price check. It always works for me and
has never failed me.

Step 5: Enjoy your profit

Things that can go wrong:

1.Update on investment item

This can be the worst dream of any investor*. Something like this can happen to anyone. Try not to panic
when this happens. Most of people just panic dump their stock. Try to set a low offer on that item and you'll
probably get a few pieces. That will soften your loss a little. After that you'll probably have to sell your
stock below its buying price.

The good thing is that your stock won't be really huge so the loss will be smaller.

Also try to avoid investing before BTS release.

*I've experienced both sides of updates. I once invested in rocktails and then came the update for new food
or something familiar (I'm not certainly sure what update it was). Anyway the rocktails crashed pretty hard.
I bought them at 1.1k and after update was released I paniced and I dumped them all away. I sold them for
~500gp per piece. The loss was huge and right after I sold stock I realized the mistake I did. I immediately
put buying offer for 512gp and I managed to buy a full limit. I waited a while and rocktails were back to ~850gp
per piece. I still lost a fortune but that flip made me something back and I've learned a lot. Just remember
not to panic if something like this happens.

*On the other hand sometimes you can get extremely lucky. Back when I was a rank we had an investment advice.
We had to post an item so we decided to go with armadyl chainskirts (limit was 10 at the time). BTS got realeased
and with it the future armadyl set graphical rewamp. Skirts went from ~11m to all the way to ~16m in a matter of
seconds and the profit was made.

*It has also happened a month ago when I was investing in clean torstol. I bought 16.5k of it for ~14k. After
that update came stating that overload stats will be boosted or something like that. I managed to sell everything
for ~17.3k which made me ~55m profit.

2. Early rise

Well not really a bad thing since items has risen (which means you got what you wanted). It may be a little
depressing at times when you only managed to buy a small stock of it and you were missing on potential
big profit. But profit is profit after all.

3. Early crash

This might be a problem when you're inactive. If you're active then you shouldn't have problems with selling
your stock. If you're inactive and if you have sell offer too high it may happen that item will crash before
it will reach your sell price. That's why I like to put in an offer for less profit just to make sure I
get rid of it (only when I'm inactive). If you got your stock left then I suggest you sell for the highest price
you can and move to the next item.

4. Never-ending fall

We all probably had experience with buying an item that kept on falling and falling and falling....
My advice is to either sell it and move to the next item or wait for it to bounce back up. It will eventually
hit the support level and will bounce back up*.

*Be carefull for recent runescape updates. They might be the reason for the crash of your item.

5. Undercutting

Not the worst thing it can happen but it's probably the most annoying and frustrating. If this happens you
should stay patient. Our stock is already low so it should sell without any major problems.
Try to undercut 1-2 times. If after that someone is still undercutting you just wait
for him to sell his stock or wait for some time (15-30mins) and undercut him again. What I like to do if something like
this happens is to sell my stock by pieces. I put an sell offer for 10% of my stock in and wait for it to sell.
After that I put another sell offer for 10% of my stock and I undercut my previous sell price without checking
margins on item once again. I do like 0.1% undercut (1k on 1m item) so I'm sure my offer is the best*.
It might be more time consuming but your stock will definetly sell faster. Profit will be a little lower, but
since your stock is low the loss won't be big compared to profit.

*Try not to use the same undercutting margin all over again. If you undercutted for 1k the first time, do like 1114 for
second time and 1333 for third time.

Final words:

When it comes to investing the only thing that counts is experience. Beginning is hard (as mentioned 100 times before)
but try to be strong. First investments will usually gain small profit or either result in loss but
they will lay very important foundation into your training. Keep on going and eventually you will
succeed. After that you'll fell in love with investing. Guaranteed

Thank you for reading my guide.

I apologize for any grammar mistakes. If something is not explained clear enough please contact me and
I'll rewrite it.

Julij2