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blankseplocked What am I doing wrong? [Trading -= taxes]
 
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Mole Eater
Posted - 2010.06.17 22:59:00 - [1]
 

Hi guys, Have been trading now for a few days. I started off with 500m and I am just not making money on it.

I do lots of trades for roughly 8-10 % profit but my buy orders +sellorders+balance stays the same. The wallet is steadily ticking over in trades but my calculated blance is not despite being 8+% trades.

Am I reading this wrong? Do I need to wait until I have skills for taxes to drop?

I am starting to work out the actual trading bit but have spent hours on it and seeing very little return

Thanks

Onyth
Had Holdings
Posted - 2010.06.17 23:56:00 - [2]
 

Hello Mole and welcome to trading

First off, you can trade without ANY skills what so ever and make a profit, the profits will however become greater with skills going up.

If you make say 10% profit, and have no trading skills (and you work with buy & sell orders), you pay a total of 3% tax (1% with the buy order and an additional 2% with the sell order), so that means you have 7% profit.

You have to keep in mind though that profit % isn't everything turnover rate also has a great deal to do with your daily/weekly/monthly profits, if you can turn over 50mil a day at 10% profit, or you can turn over 500mil at 5% profit... Well you don't have to be a genius to figure out wich earns you more :p

I can ofcourse not say what you're doing 'wrong' without actualy seeing WHAT you're doing, but if you try to keep your capital on the market, turning it over as fast as you can, without trading in items that actualy cost u isk to trade in (aka profit margin doesn't cover taxes) you should see your wallet growing steadily with time.

Lord Grimmas
Azure Freelancers
Posted - 2010.06.18 02:44:00 - [3]
 

If you are making an 8% profit on your trades you should be seeing your total value go up steadily. Don't forget to add the value of whatever yet-un-traded assets you have lying around in your hangar.

money in escrow + sell orders + cash on hand + value of assets

Mole Eater
Posted - 2010.06.18 06:58:00 - [4]
 

Thanks for the info guys. I think what I was doing wrong was:

1: Creating/cancelling too many orders - need to set up and leave them - I think the main tax is taken out when you start the order?
2: Going purely on margin - even if I make 10000000b isk profit due to volume, if that is under 3% (or whatever skill level is at) I will still not make money.

Getting there I think

Thanks

Prototype ZX
Posted - 2010.06.18 07:09:00 - [5]
 

You also have to understand the higher the capital you invest the more your potential profit. If you only trading with lets say 50 to 100m. Your profit margin won't be that big. It's better to buy in bulk and then sell in bulk. Also, even though someone has told you, location location location man. If you were ever a combat pilot you would understand the best locations to sell things. I used 500 to 600m worth of ISK in buy orders with another 500 to 600m in sell orders. Taxes are the biggest ***** when you start with the higher value orders. So what your doing now is good. Learn more about the market, get your skills up then invest more money.

Dr Nefarius
Posted - 2010.06.18 07:12:00 - [6]
 

Originally by: Mole Eater
Thanks for the info guys. I think what I was doing wrong was:

1: Creating/cancelling too many orders - need to set up and leave them - I think the main tax is taken out when you start the order?
2: Going purely on margin - even if I make 10000000b isk profit due to volume, if that is under 3% (or whatever skill level is at) I will still not make money.

Getting there I think

Thanks


Yeah, don't create/cancel many orders. If you need to change the price of the order, you can do that with selecting 'modify' on your orders.

Yiulian
Boathouse Industries
New Eden Research.
Posted - 2010.06.18 07:35:00 - [7]
 

Originally by: Mole Eater
Thanks for the info guys. I think what I was doing wrong was:

1: Creating/cancelling too many orders - need to set up and leave them - I think the main tax is taken out when you start the order?
2: Going purely on margin - even if I make 10000000b isk profit due to volume, if that is under 3% (or whatever skill level is at) I will still not make money.

Getting there I think

Thanks


As to 1, Broker Fees are taken out when you put up the order. If you then cancel it, you don't get those back. Sales tax on the other hand is (as the name implies) only taken out once the sale is actually made. But generally speaking putting up an order and then cancelling it is a bad idea as you lose up to 1% of the value of the order (depending on standing & skills)

Personally I don't like to trade items that have less than a 30% margin, but I guess if you can get a really high turnover it would be worth it. It's all down to trading styles and preferences in the end.

Onyth
Had Holdings
Posted - 2010.06.18 08:29:00 - [8]
 

Originally by: Yiulian
Personally I don't like to trade items that have less than a 30% margin, but I guess if you can get a really high turnover it would be worth it. It's all down to trading styles and preferences in the end.


You don't get too many of those at the places where the majority of the trading is being done :p

But yeah, sometimes the extreme low margins realy make you wonder if you're actualy making a profit at all, but when you do the math, its clear that you are.
That being said, using a trade tool/spreadsheat (or a combo) is definatly a good idea to keep track of ur isk.

clixoras
Posted - 2010.06.18 14:28:00 - [9]
 

Originally by: Onyth
Originally by: Yiulian
Personally I don't like to trade items that have less than a 30% margin, but I guess if you can get a really high turnover it would be worth it. It's all down to trading styles and preferences in the end.


You don't get too many of those at the places where the majority of the trading is being done :p




That why new traders are better of NOT starting in Jita anyway.

Yiulian
Boathouse Industries
New Eden Research.
Posted - 2010.06.18 18:06:00 - [10]
 

Originally by: Onyth
Originally by: Yiulian
Personally I don't like to trade items that have less than a 30% margin, but I guess if you can get a really high turnover it would be worth it. It's all down to trading styles and preferences in the end.


You don't get too many of those at the places where the majority of the trading is being done :p

But yeah, sometimes the extreme low margins realy make you wonder if you're actualy making a profit at all, but when you do the math, its clear that you are.
That being said, using a trade tool/spreadsheat (or a combo) is definatly a good idea to keep track of ur isk.



I beg to differ. I started out in Jita and still trade a part of my stuff there. It's not always easy but I still trade at high margins with what I think are reasonable volumes.

My average profit margin for the last 14 days in Amarr and Jita (both trade hubs) was somewhere around 40%. I didn't trade as much volume since I wasn't online much, but still made close to 1B profit.

Whether or not it's the most efficient way of doing it I can't tell you. I obviously spend a lot more time scouting out items to trade and don't have as many 'fixed' items since prices shift and I need to switch products to follow.


 

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