Friday, August 3, 2012

Station Trading 101

You asked for it, so here it is: my guide to making your fortune by playing the market in EVE.  I'll be covering the basics of station trading in EVE.  This guide is written from my perspective, working my way up from an initial investment of 500 million ISK to about 2 billion in ISK + assets in about 2 weeks.

Table of Contents:
  1. Preface
  2. Skills
  3. Home Base
  4. Choosing Items
  5. Setting Up Orders
  6. Checking and Maintaining Orders
1. Preface

This guide is written from my personal experience trading.  The techniques used here may or may not work for you.  That being said, I believe that once you get a decent amount of ISK to start with (hundreds of millions), the best way to further your wealth is to do station trading with the ISK.  Unless you find joy in spreadsheets and numbers and never undocking, I recommend the creation of an alt to use for station trading only.  I have an alt that I use for trading that does nothing but modify orders.  No ships, no undocking, just numbers.  Before beginning, here is what I recommend you have:
  • An alt that you don't mind not flying with again on an account that can spare a few days of skill training time.
  • Investment capital.  I suggest starting with at least 500m but as low as 100m will still generate profit that is not insignificant.
2. Skills

As a trader in EVE, you'll need a few skills to make a profit and make sure that this profit is as large as it can be.  There are plenty of of skills in the "Trade" category, but many of these are not needed for basic station trading.  Many of these skills are not strictly necessary for trading; it's very simple to flip items and make a profit.  However, to maximize your profit margins and ensure that you can always keep up with your orders, it is a good idea to train these skills to respectable levels. For now, there's not much reason in bothering with the skills that modify the range at which you can modify buy and sell orders as you'll likely have an alt that will remain in one station trading permanently.  There are three groups of skills we need to train. 

The first is to decrease the amount of ISK that is taken from our market orders through market related costs.  The skills Accounting and Broker Relations are used to decrease this margin.  These are good skills to train because they reduce the amount of ISK that is taken out of your pocket by game mechanics with every transaction. 

The second group is a single skill: Margin Trading.  This skill reduces the amount of ISK you have to put down when you make a buy order.  Without the skill, if you make a buy order for 1,000 units of Tritanium at 1.00 ISK each, you have to put down the entire 1,000 ISK required upon making the order.  However, with Margin Trading I, you only have to put down 750 ISK to make the order.  The other 250 ISK is subtracted from your wallet upon completion of the order.  This way, you can have many more active buy orders than you have ISK. For example, I currently have 869 million ISK in active buy orders.  Because I have Margin Trading IV, I only had to put down 163 million ISK.  I have 464 million ISK remaining in my wallet.  This means that if all of my buy orders filled simultaniously, I would not be able to pay for them all.  Although this might seem like a bad idea, in reality buy orders usually fill very slowly, and the ISK you make through sell orders comes through at a rate fast enough to replenish your wallet before it is drained by buy orders.  This makes this skill very handy to have. 

The third group of skills is the group that modifies the amount of active buy and sell orders you can have.  The amount of orders allowed by these skills grows with each progressive skill, starting with 4 orders per skill level of Trade and increasing to 32 orders per skill level of Tycoon.  Earlier on (high millions/low billions) you will likely not need to train above Wholesale, if at all.  Later on, if you choose to increase the volume of orders you manage, you may wish to train further.  Keep in mind that although more active orders = larger income, it also increases the time you need to go through all of your orders and make sure they remain on top.

  • Trade
    • Knowledge of the market and skill at manipulating it. Active buy/sell order limit increased by 4 per level of skill.
  • Accounting
    • Proficiency at squaring away the odds and ends of business transactions, keeping the check books tight.  Each level of skill reduces transaction tax by 10%.  Requires: Trade IV
  • Broker Relations
    • Proficiency at driving down market-related costs.  Each level of skill grants a 5% reduction in the costs associated with setting up a market order, which usually come to 1% of the order's total value. This can be further influenced by the player's standing towards the owner of the station where the order is entered.  Requires: Trade II
  • Retail
    • Ability to organize and manage market operations.  Each level raises the limit of active orders by 8.  Requires: Trade II
  • Wholesale
    • Ability to organize and manage large-scale market operations.  Each level raises the limit of active orders by 16.Ability to organize and manage large-scale market operations.  Each level raises the limit of active orders by 16.  Requires: Retail V, Marketing II
  • Tycoon
    • Ability to organize and manage ultra large-scale market operations.  Each level raises the limit of active orders by 32. Requires: Wholesale V
3. Home Base

Once you've started skill training and feel that you've trained enough to begin trading, you'll need to choose a home base.  Your home base depends on the amount of time you'll be able to dedicate to trading.  Someone who updates their orders every 15 minutes will find that they will make much more money in Jita than in Rens, while someone who updates their orders once or twice a day generally won't make as much ISK in Jita as they could in another trade hub where their orders will not be undercut as often.  The top three trade hubs in order from largest to smallest are Jita, Amarr, and Rens.  Here is a link to a table of EVE's 30 top trade hubs.  If you find the hub you're trading in to be too competitive, it might be a good idea to find another one farther down on that list and switch to that hub. 

My experience trading in Jita 4-4 has been a positive one.  It is frustrating to see people undercut my order by a large amount, but in general I have enjoyed the fast paced market and the quick ISK generation.  After settling on a home station, get your character there and dock up.  Enjoy the sights as your ship is towed into the station, you won't be seeing them on that particular character any time soon.

4. Choosing Items

Now that you've got your market alt created, skilled, and docked in the station you've chosen at your home, it's time to get down to the nitty gritty of trading.  A good program to use for identifying items is EVE Mentat.  It's an amazing program with a lot of cool features that would require a whole seperate guide.  Even without the aid of software, it is still pretty straightforward to find an item to trade. 

First, open your market browser.  Open up the Ship Equipment category to start and navigate to your favorite type of module.  In this example, I'll use shield extenders to demonstrate how to choose an item.  This is the market page for Medium Shield Extender I.  Looking at this page, we can see that the current highest buy order in the station (because remember, this is station trading, we want to only deal with items and orders in this station.  I don't want to be running around collecting loot at all) is 20,592.06 ISK, and the lowest sell order is 41,187.99 ISK.  This means that for every unit of this item I buy through a buy order and then sell through a sell order, I'll be almost doubling my ISK (after taxes).  Sounds great and all, but keep in mind that this item is very low value.  At 20k ISK a unit, I won't be making billions off of this item alone.  Because of the amount of ISK I have, I have decided that I do not want to trade this item, as I can trade other higher value items in higher volumes to make more ISK with my order.  However, for the purposes of this guide, I will demonstrate my process with this item. 

What we can see from this screen is that the profit margin on this item is about 100%.  This means that when I make a buy order for the item and then sell it through sell orders, I will be making a profit of 100% on my investment.  Next, we click on the Price History tab towards the top.  This screen shows the 3 month price history of the item.  From this chart we can tell quite a few things.  First I will break down what each part of the graph means.  Put on your thinking hats and get ready for some SCIENCE! (Not really)

  • The red line represents the 5 day average. 
  • The green line represents the 20 day average. 
  • The yellow dots and red silhouette represent the volatility of the item.  The narrower the silhouette is, the less volatile the price of the item is. 
  • The green bars on the bottom represent the volume of the item being moved every day. 

Now let's analyze this graph.  Together.  Take a look at the red line.  It seems to be spiking in some areas.  However, the green line is mostly stable.  The areas where the item's price spikes are the areas in which the silhouette is the widest.  This could indicate that the spikes are caused by market anomalies, while the price for the item seems mostly steady.  Now looking at the bars on the bottom of the graph we can see that an average of 2,000 units are moving through the market every day in this region.  That's a possible 2,000 * 20,000 = 40 million ISK profit every day, if your orders are ALWAYS on top.  If you have a life, this is very unlikely; expect much less from the item.  However, it is obvious that there is ISK to be made.

What I look for when choosing an item is a good profit margin (>30%) and a good volume being moved every day, along with a steady price line.  This meets all of the above.  Before making an order, I want to add the item to the market quickbar.  This is a list of my "favorite" items on the market that makes it easier to manage my orders.  By adding the item to the list, I won't have to navigate through so many market menus to see it, all I have to do is click on the quickbar tab in the left pane of the market window. 

For those of you who would like to go more in depth into choosing an item, I recommend reading this article from E-UNI. It's a method called the Bullworth Burger.

5. Setting Up Orders

Now lets go ahead and make a buy order.  Here are the settings I use for my buy orders.  I set the price to 0.01 ISK higher than the highest buy order in my view that has a green bar on it (green bar means they can buy items in Jita.  This means that green bar = competition).  I set the minimum quantity to 1, the  duration to 3 months, and the range to the current station (like I said, I don't want to do any hauling).  It would be a good idea to tick Remember Settings now so that you won't have to modify those portions of the order window when next you choose to make an order.  As for the quantity, I choose a number that is less than or equal to the daily average of how many of the item move through the market.  If the item is expensive, I limit my orders to a max of around 200 million ISK; otherwise, my quantity usually matches the daily average.  As my buy order begins to fill, I make a sell order.  Generally, I will start selling items as the estimated value of the stack approaches or exceeds 5 million ISK.

6. Checking and Maintaining Orders

Now that I've made my buy order, all there is to do is to wait for it to start filling.  Every so often, I will have to update my orders to make sure that mine are on top.  To do this, open up your wallet and hit the orders tab.  Double click an item in the tab to open it in the market window.  To make it easier to manage your orders, open up the market window and hit the settings tab at the top.  Check the option labeled mark my orders.  Now open an item you have an order on in the market window.  The orders with blue bars around them are yours.  If your order is not the highest buy or lowest sell order, click on your wallet and right click the order.  Click modify order.  Change the value of the order to 0.01 ISK above the highest buy order or below the lowest sell order to make sure your order is the one that's moving product.  It costs 100 ISK to change an order and it can only be done once every five minutes for each order.  If you keep on top of your orders and make sure that you're currently leading the market, you can sit back and watch the ISK roll in.

antarioo has contributed this wonderful advice:
"Time expenditure or Isk/hour
The same as With mission running you also have to take your time spent to gain isk in mind, if you babysit your buy orders but only make a 100 mil profit over 4 hours then you might as well run missions. Key to this Strategy is playing into the hands of the weekly and period fluctuations of the market you bought into.
Take the shield extender example, its price changes has a 25% bump every couple weeks and has a small fluctuation upon the weekly cycles (meaning the difference in player activity and ships destroyed over the course of a week). Thought this item will most likely only be influenced by supply rather then changes in demand due to its meta 1 status.
To cash in on this drift your better off in markets like manufacturing materials, LP rewards and frequently used modules. As player activity rises during the weekend, so does the supply in remote areas, while manufacturers buy in bulk in jita and haulers sell in bulk at the same time. Managing the difference between buy and sell price at these moments can yeild some good results but dont require a lot of updating your buy orders. Simply wait a few hours and the next missioner or freighter comes in and fills your orders and the 5 above yours.
While the demand for modules increases somewhat due to the increased activity of combat.
Combine all these simple techniques together and you can spend very little time sitting in your chosen hub updating and more time doing other activities. Turning trading into a very nice passive income
This is recommended for players with a high bankroll or for those simply looking for a place to invest their isk, professional traders should also incorporate a few elements. Since remember: time=isk!"

That's it for this guide!  I hope you learned a lot.  Anyone with any suggestions please feel free to PM me and I would be happy to add your suggestion to the guide and credit you.  If you liked the guide, feel free to share it so that others can see it.  If you'd like to donate, I accept ISK donations on the character JustCallMeDaddy very happily.  Thanks for reading, and fly safe! o/


1. buy low
2. sell high
3. ??????
4. profit!!!

I have created an in game chat channel, reddit trading for use by the community to talk about trading in EVE.  Feel free to join the channel and chat each other up!