Graph Reading Basics
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Graph Reading Basics
by [ADMIN] Billious 29/12/2013, 9:18 am
Graph Reading Basics
For those of you who have graduated the flipping mentor group (or read the guides) you've already been acquainted with the importance of the item graphs. They're extremely useful in the area of overnight flipping. In investing they play the main role in every investment you make so you can't really invest successfully without understanding a few basics about them.
Runescape graphs are two-dimensional drawings in form of a line representing the item's movement in the grand exchange. They're based upon item's trades that were made in grand exchange. They're updated once per day and they reflect the past daily average price item was traded for. So if an item was traded above the average yesterday, then today's graphs will show this in form of a rise. Because graphs present us with past averages the actual price of an item is different than the one shown on graph.
Runescape graphs are two-dimensional drawings in form of a line representing the item's movement in the grand exchange. They're based upon item's trades that were made in grand exchange. They're updated once per day and they reflect the past daily average price item was traded for. So if an item was traded above the average yesterday, then today's graphs will show this in form of a rise. Because graphs present us with past averages the actual price of an item is different than the one shown on graph.
Stable Graphs
Stable graphs can be broken into 2 main types, ones that are traded often yet don't vary in price much at all or ones with graphs that look like steps.
Commonly traded stable graphs tend to be things like rune items where the main demand for them is to high alch them to train magic. Because of this they never rise very high as you lose profit/increase costs training this way and this lowers the demand for them. So the price drops, but if it drops too far below the high alch value then many players start to buy creating an increase in demand and raising the price back up. The variation in price on items like this is so small that even a successful investment would earn less than flipping most other items.
Step graph items are rarely traded in grand exchange so there are not enough filled offers to update the graph. They usually get updated every once in a while. It is recommended you stay away from them when investing. Items with step graphs are rarely traded so accumulating stock and getting rid of it may take time. Since they take longer time than normal graphs to update the rises/falls are much slower making your investment longer than you would wish it to be.
Graph: This is a month's graph of the pernix boots. As you can see they rarely fluctate and there are atleast a few days before it actually happens. It's just not worth the time or the money, specially since it has a 4 hour limit of 1 making stocking a very slow process.
Commonly traded stable graphs tend to be things like rune items where the main demand for them is to high alch them to train magic. Because of this they never rise very high as you lose profit/increase costs training this way and this lowers the demand for them. So the price drops, but if it drops too far below the high alch value then many players start to buy creating an increase in demand and raising the price back up. The variation in price on items like this is so small that even a successful investment would earn less than flipping most other items.
Step graph items are rarely traded in grand exchange so there are not enough filled offers to update the graph. They usually get updated every once in a while. It is recommended you stay away from them when investing. Items with step graphs are rarely traded so accumulating stock and getting rid of it may take time. Since they take longer time than normal graphs to update the rises/falls are much slower making your investment longer than you would wish it to be.
Graph: This is a month's graph of the pernix boots. As you can see they rarely fluctate and there are atleast a few days before it actually happens. It's just not worth the time or the money, specially since it has a 4 hour limit of 1 making stocking a very slow process.
Downward/Upward Trend
Downward trend means item is falling in price over a longer period of time. Even though the item is falling overall in price it will still fluctuate during the day. Graphs will still show rises and falls but because the item is falling in overall price, rises will be smaller and falls will be bigger.
Upward trend means the item is rising in price over a longer period of time. Even though the item is rising overall it will still fluctuate during the day. Graphs will still show rises and falls but because the item is rising overall in price, rises will be bigger and falls will be smaller.
Upward trend means the item is rising in price over a longer period of time. Even though the item is rising overall it will still fluctuate during the day. Graphs will still show rises and falls but because the item is rising overall in price, rises will be bigger and falls will be smaller.
Support/Resistance Levels
A support level is an imaginary line that prevents an item moving through it or at least makes it more difficult. It's the expected lowest point the item is going to hit after a crash, only to bounce back and rise again. On graphs it can be seen as two or more low points in which item stopped decreasing in price and it started rising again. The more points you line up the more accurate it is.
A resistance level is an imaginary line that prevents an item moving through it or at least makes it more difficult. It's the expected highest point item is going to hit after a rise. On graphs it can be seen as the highest point or more points in which item stopped increasing in price and it started falling again. Again the more points you line up the more accurate it is.
Support and resistance levels are probably the most important things in investing. When looking at previous rises and falls of an item you can see how the item behaved during that period of time. This will help you predict its future movement.
The basic idea behind support/resistance levels is that you want to buy your item before it reaches support level as that's when it will bounce up and sell if before it reaches the resistance level as that's when item will start falling in price. More about buy/sell times will be explained in next lesson.
A resistance level is an imaginary line that prevents an item moving through it or at least makes it more difficult. It's the expected highest point item is going to hit after a rise. On graphs it can be seen as the highest point or more points in which item stopped increasing in price and it started falling again. Again the more points you line up the more accurate it is.
Support and resistance levels are probably the most important things in investing. When looking at previous rises and falls of an item you can see how the item behaved during that period of time. This will help you predict its future movement.
The basic idea behind support/resistance levels is that you want to buy your item before it reaches support level as that's when it will bounce up and sell if before it reaches the resistance level as that's when item will start falling in price. More about buy/sell times will be explained in next lesson.
Special thanks to Julij2 for making this guide with the help of the Investment Mentors Pudd, Connor and the help of Minato.
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