Unagileguth's active flipping tip

First of all I would like to say that this is not a guide for beginners, if you want to learn how to flip I recommend you to search for guides in the "Rated Merchanting Guides" section of the forums. In this guide I will try to explain how an item crashes while you flip it and how to minimize losses, so lets get started.  


In the above image we see a graph of an item.  As you may noticed theres only vertical and horizontal lines, lest say that every vertical line is an offer that has just been completed/aborted and every horizontal line is an offer that is currently selling/buying.  So that means that with every corner, the previous buyer/seller gets undercuted / overcuted or just completes his offer.  As you see, in the middle of the graph theres a big "spike" and it seems that lot of profit can be made but the problem is that it crashes very soon (see the red arrow).  Those short-lived spikes appear to be quite common and act like a trap for the merchant.  One would price check the item and by seeing the high margin he will set a buy offer but unfortunately the item will crash below his buy price.  Of course most of the times the item will go back again but he would have lose valuable time and money which could have used to flip more items.

And how can I prevent this from happening to me?
Simply if you see an item whose both high price and low price are above its guide price* (while not rising) and has an unusual high margin don't flip it.

So can in any way benefit from all this?
If you still want to flip it you should be careful, put smaller offers and price check it more often although I don't suggest it as you can make more money by flipping other items.

Even though after most crashes the price will go up withing few hours there are some that would take days or even weeks (if you are extremely unlucky).  When an item is reaching its peak, usually, happens what happened at the example above and I know this from personal experience.  As usual, I was flipping at the grand exchange when I price checked one armadyl battlestave, its low price was around 16.2m and its high was around 16.6m, with quick calculations I realized that I could easily make at least 3.5m profit so I brought 9 and and left them on offer at around 16.5m and went to sleep.  The next day no one had been sold also it was crashing bad (if I dumped them then I would had a loss of around 15m!).  After I looked up the graph I decided to keep them but it took roughly 2 weeks to come back to 16.5m (just think of how much money can be made in this time with ~150m).

*Guide price = The price set by the grand exchange.

I hope this helps and if you want, leave any feedback on your comments please.

Thank you

The example of armadyl battlestaff you provided was not the best one. It seems more like it was an overnight flip gone wrong. You don't leave overnight offers in like that especially if you don't know in which general direction item is moving.

For active flipping spikes like these are the best moneymakers. With active flipping prices don't adjust so quickly. You just have to remember to not buy a full limit so you can always check the high price again if your item is selling. If you're active you shouldn't have any problems with losing money. It may happen sometimes but overall I can say it's worth the risk.

Although it's a good tip for those who are just starting with merchanting.

Yeah, I must say I disagree with this guide. All it does is teach you to fear big margins and create a zombie-like cult of bulk flippers. The true lesson is as Julij2 "Julie" said:

1) If you're going to do a flip where both high and low are over ge price, don't hold long
2) Always look at the trends of an item with a large margin and/or one that you intend to hold for awhile (even if it only is overnight).

I think you've found a creative solution for your problem, but I don't think it's the right one.