Station Trading in EVE For Alphas
Making ISK can be a constant struggle for EVE Online players both new and old. A lot of people will suggest industry or PvE as a great starting point for new players. I’m here to suggest another alternative for new players which has an even lower barrier to entry than basic PvE or industry.
This guide will serve less as a comprehensive guide to station trading and more a series of tips for Alpha Clone players to make use of in their journey to making ISK.
What is Station Trading?
Station Trading is the process of buying low and selling high, within one specific station. Generally this station will be a Trade Hub. Station trading is not quite a form of passive income, however the amount of time spent on station trading is entirely up to you. The core mechanic of this profession is to set up a buy order for an item, wait for someone to sell the item to your buy order, and then put up a sell order for the item at a higher price. The margin between the price at which you buy the item and the price at which you sell the item (minus taxes and fees) is your profit. Most time is spent updating your orders. In order to maximize your profit, you have to make sure your buy orders have the highest price and your sell orders have the lowest price, both usually by a tiny margin relative to your competitors.
In order to get started station trading, you need a few things:
- A dedicated character
- Skill training
- A location
- Starting capital
Compared to other professions, especially those that earn you a profit, station trading is relatively easy to get into. However, as with just about all the activities, your time spent will become more profitable the longer you train and the more experience you have.
The training is incredibly simple, you only really need a few skills:
Trade – Adds 4 additional orders to your pool per level.
Retail – Adds 8 additional orders to your pool per level.
Accounting – This is the most important skill for any prospective trader. Every level in this skill reduces the transaction tax by 10% per level.
Broker Relations- Second most important skill, Reduces broker’s fees by flat 0.1% per level.
However, there is one other skill you could train to increase how much ISK you can leverage at a time:
Margin Trading – Reduces the amount paid to escrow by 25% (cumulatively) per level. NOTE: This skill requires an Omega account.
Grab a few of the skill books listed above and get training. It’s worth remembering that most new player corps and alliances have programs that will supply these skill books and more to new players for free.
The best part about trading for me is that I can use an alt that has less than 4 Million skill points to make billions of ISK if I work hard enough.
Location, Location, Location
A lot of people will repeat this adage in business, both in EVE and in the real world. For station trading it really matters in two ways: where you position your trading, and the timing of those trades. If you’re trying to trade outside of a market hub, you’re going to struggle as a new player. So for now, pick a market hub and stick to it. This means Jita, Amarr, Dodixie or Rens for the vast majority of trading in EVE.
Timing is important for one reason, you need to be active in the market to receive supply or fill demand. For most traders, that means pushing orders to the top of the stack for Buy Orders and Sell Orders.
Basics of Trading
There are a few things to keep in mind when selecting items to trade.
This is the first thing you should consider when looking for items to trade. Remember those fees we mentioned in the skills section? Those broker fees and taxes are two of the biggest costs you have as a trader. Assume that at the minimum 5% of your profit will go to these fees and taxes. So I always try to aim for items that have at least a profit margin of ~10% before fees and taxes.
Your profit margin can be estimated by checking the difference between the lowest sell order and the highest buy order that are currently already up. The true profit margin is dependent on the price you end up paying for the item when it is sold to your buy order, and the actual amount of ISK you get when your sell order is completed. Since you are are likely going to be updating your orders because of competition, your buy order’s value will be higher than the current highest buy order. The same goes for your future sell order. The true profit margin also takes taxes and fees into account.
Whilst an item’s initial profit margin might seem very attractive, you should not invest in the item until you have taken a look at the trade volume. The trade volume is the amount of items that have been traded, meaning bought as well as sold, for a particular time frame. The easiest way of getting an indication of an item’s trade volume is having a look at the price history table. The exact number of units that has been traded during a single day is listed in that column. In the graph view, the quantity is displayed as a bar graph, giving you an easier insight in the historical development of the trade volume.
For a lucrative item the trade volume is high, but always relative to the price of the item and in balance with your capital and number of market orders available to you. All else equal, an item with a decent profit margin but with a rather good trade volume is better to invest in than an item with double the profit margin, but only a quarter of its trade volume. You always need to keep checking on the volumes, margins and behavior surrounding an item to determine whether you should keep trading in it once you’ve initially invested.
When looking deeper into the market behavior of a particular item, the trade balance is another indicator that can help you make your investments more profitable. A well balanced item is one that is being sold to buy orders in the same quantity as its being bought from sell orders. As the quantity column gives us the trade volume, it does not distinguish between buy orders and sell orders being fulfilled. You can get a good indication of this when looking at the average price, in the price history table. This median value is the middle price of all trades from that day, separating the higher half of the values from the lower half of the values.
This is the demand side of economics in EVE. If an item gains popularity, it is likely set to increase in price until the supply of this item catches up. If the supply is static, the price may steadily increase over time. Having a look at the price history graph, set to medium to longer term, can give you an idea how the price may develop over longer periods of time. If you plan on investing in a particular item, you can choose to sell it off for more, simply by waiting for the price to increase over time.
A perfect example of this necessity is where it pays to keep an ear on politics in EVE is NullSec. NullSec alliances consume large amounts of raw materials and finished goods. And many of them rely on market hubs like Jita to fill their needs through imports.
Understanding the mentality of those within a market is vital as a trader. Not everyone else trading in an item is station trading. Some people might be just like you, a brand new player who would jump through three systems to save a few thousand ISK on a skill book. You can leverage those kinds of players for huge profits in EVE, but you have to be able to identify them first.
It’s for this reason that I recommend picking up some books or other info about consumer psychology. Understanding the way shoppers think on a deeper level can seriously up your potential to succeed both in EVE and the real world.
You’re never the only trader investing in a particular item. There will always be competition trying to undercut you and get their orders filled first. Part of your trading strategy must about observing and reacting to these changes in market conditions.
One way of trying to gauge if a market is safe to enter, or very risky to enter, is to see the balance between buy orders and sell orders. In a volatile or cyclical market, the balance between competitors putting up sell orders and competitors putting up buy orders can give you a clue as to how the price may develop in the future.
If an item has a significantly higher number of buy orders than sell orders, this indicates that many other traders consider the market conditions to be favorable enough for them to enter this market. If you can handle the amount of competition, you could consider entering the market as well.
On the other hand, if there are significantly more sell orders than buy orders, this indicates that there are already a good number of traders in this market, and fewer new ones are entering this market. As traders would like to get their profit as soon as possible in order to invest it again, they are likely eager to get rid of their sell order. This puts pressure on the sell prices, often causing them to fall over time. This is an indication of an unhealthy market and investing in the item would be considered risky.
The 0.01 ISK Game
This is the mostly mindless part of trading, and the most tedious. The essence of this trading strategy is to sit at the top of the pile for Buy or Sell orders for as long as possible. You have to consistently update your orders once they’ve been placed in order to fulfill them at competitive prices.
Using the quickbar, combined with having your orders marked in blue, you can rapidly check all your orders. This is done by clicking the first item in the list, checking if your order is still the best one, and then using the down arrow key to go to the next item. When modifying an order, you can use the up arrow and the down arrow keys to adjust the price by 0.01 ISK.
There will be times when item prices jump by more than 0.01 ISK. Make sure not to mistype when entering in a new price. You can use Tab when entering prices in their field to have the value auto-insert commas to make it easier to read. Just try not to end up putting a sell order for one fewer digit, or a buy order for two digits too many.
In order not burn out, don’t update your orders 15 times a day, but schedule moments where you can spend 5-20 minutes (depending on the amount of orders you have out) to make sure your buy orders are the highest available. However, the more time you spend, the more profit you’ll make.
Things to Keep in Mind
Don’t pour all your ISK into trading – You always need liquid ISK in EVE. I almost never sink more than 20% of the wealth on my trading character into trading at one time. Although you’re more likely to run out of trade slots than you are to exhaust your money supply.
Another aspect of this is that you have to pay attention to the volumes and overall value of an item you’re looking to trade. This is especially true depending on how much ISK you have to trade. The more ISK you have to sink into a particular market, the more careful you have to be because you could potentially sink too much ISK into too small of a market.
For example, if you have 100 M ISK, but the daily trading value of an item is only 200 M, you’ll have to fight for a huge amount of market share to leverage all of your ISK. Keep that in mind when selecting items.
Don’t use all your open order slots at once – This ties in with the previous rule quite well. You always want to be flexible and have some spare liquidity to jump on quick changes in the market if you can help it. Nothing is more frustrating than having to wait for an order slot to open up to take advantage of good margins on an item, only to have those favorable margins disappear once you’re able to take advantage.
Don’t get comfortable – The inability to move ISK out of unprofitable trades or to dump excess stock can kill your wallet. Never get to far in to trading an item that you cannot liquidate all of your stock if need be. This is helpful if you notice the margins contracting on an item and want to look for more profitable trades elsewhere.
Learn to avoid competition – There will be a lot of competition, especially for high-margin items. Always expect to be outbid or priced out of the market at any time. Learning to observe when a market is too competitive is something you’ll have to do as a new trader. Luckily, ISK is very easy to come by in EVE, so if you lose money a trade; just make a note of that item and avoid it in the short-term, only to come back when market conditions are more favorable.
Gather Intel – Trading in the real world relies on reacting to changes in the world around you. The same thing is true in EVE. Pay attention to the fits used in combat by NullSec alliances and pay attention to the most expendable items. Faction ammunition is a huge money spinner for this reason. You’ll also want to pay attention to the various EVE Online news sites and read through the recaps they often write of large fleet engagements. After a major engagement, alliances will have ISK to spend to import new hulls and equipment for their doctrines. Being in a good position to take advantage of the price spikes that these trends cause is a great way to make ISK.
For similar reasons, READ THE FREAKING PATCH NOTES! Every time new balance or mechanic changes are announced, the markets go nuts. These periods of volatility are a great way to make a quick an easy amount of money. Although you’ll want to be careful speculating too hard on patch notes. Because if you don’t have the game knowledge to understand if a set of changes will make a particular item weaker or stronger, you won’t be able to leverage against the change.
Do Something Else – When you’re invested in various markets, it’s almost always more profitable to do some other in-game activity as opposed to babysitting orders to play the 0.01 ISK game. Go mine, do some Project Discovery samples or a PvE mission to make some ISK between the downtime you update your orders.
If you’re the kind of person who is more inclined to understanding visual media, here’s a great Fanfest presentation that goes over some of the finer aspects of trading: