TRADER TIPS
COLLECTION OF TIPS - THE CONTEST WINNER by Stringbois
This is mainly a compilation of what I learned as a Trader. Please consider this as an addendum to the Idiot's Guide - read that first, read it several times.
The one mind-block for me, that took several days to get around, was that when dealing with contracts, you aren't looking at exchange prices in the future, in deciding when to sell (per se) but, you're wanting the future 'contract' price to change.
1. Helpful phrases used/invented by Traders when chatting with each other.
- Futures: The Commods that each Exchange offers for Traders.
- Contracts: A Future that you have purchased.
- Refresh: Server goes down for maintenance once a day, at that point, all Contracts are liquidated, and the exchanges make a new list of Futures. This is also called the game reset.
- Reset: Once every hour, each Exchange clears out any Suspended Futures. Different from the game reset.
- TOD: Tip Of the Day: a Contract that will last until Server Refresh. Usually having a spread of 150 or more.
- Spread: The difference between a Future/Contract and the calculated Exchange Price.
- Mixed: A Short or Long Future that the exchange is offering. The exchange is both selling and buying, will continue to be mixed until the stock level offered hits 626 units.
- Points: The difference between the contract price and the current Futures price.
- TR: Trader Ratings.
- Liquidate: To get rid of a future, either by selling it, or waiting for Server Refresh and having the Server liquidate it.
- Suspension: When a Future moves 5 Points between Resets, the future is suspended. You may not buy a Suspended Future, but you can liquidate it.
2. Helpful Calculations
A BUY is always calculated by taking the Exchange Buy Price and dividing it by .9 to get the Target Price.
A SELL is always calculated by taking the Exchange Sell Price and dividing it by 1.1 to get the Target Price.
A LONG means you want the contract price to keep going higher.
A SHORT means you want the contract price to keep going lower.
The Exchange will show a sell price, when the stock level hits 75 units (one full bay). Stock level will never go above 700 Units.
Long Buy: (ex/.9) - Futures = spread. The spread needs to be a positive #, then this future is good. Which means, the calculated exchange price is higher than the futures price, which will gradually drive the futures price higher. This is the most common TOD.
Long Sell: (ex/1.1) - Futures = spread. The spread needs to be a positive #, this is a hardest future to deal with, as the calculated ex price is higher than the Futures price, you want the Futures to go higher, this Contract needs be watched closely because, as the stock is built up in the exchange, the sell price typically goes lower. Bad for you.
Short Buy: Futures - (ex/.9) = spread. The spread needs to be a positive #. This is also a harder future to deal with, needs to be watched closely, because you want the calc buy price lower than the futures price, as stock is used up by the exchange, typically, the buy price goes up. Bad for you.
Short Sell: Futures - (ex/1.1) = spread. The spread needs to be a positive #. This is typically a good contract, because, as the stock level rises, the price offered in the exchange, keeps dropping. Until it hits max stock level, the spread should widen.
Long Mixed: (ex. sell + ex. buy)/2 - Futures = Spread. Mixed are harder to deal with, because, as the stock level goes up, both the exchange sell and buy prices change. You want the average "(sell + buy)/2" to be higher than the futures price. Also, once the stock level hits 626 units, this turns into a Long Sell.
Short Mixed: Futures - (sell + buy)/2 = Spread. Once stock hits 626 units, this turns into a Short Sell. This also has opportunity to be a TOD.
3. Helpful hints
Knowing when to sell - Short answer, if you wouldn't buy that future, then it's time to sell. Long answer, because of the fluctuation in the exchange markets, the spread will typically go up and down, when the spread goes negative, that means the future might go in the wrong direction, so it's time to sell.
Suspension of a future - the future has moved in one direction 5 points since the last reset. Suspension might last as long as 30 mins or more, or be quite short (if it's gone up and down during that hour). You may not buy a future in Suspension, but you can sell it, a suspension also gives you time to watch the movement of the spread, as the Future will not change.
It's not untypical to do negative in TRs when you first delve into futures. Don't worry, as you start to understand how futures work, you will get better, trust me, I was a negative 60 my first day... GASP!
Never be afraid to ask questions, attend in-game classes and ask more questions.
When you log into the game, immediately type Join Channel Trader Talk, where you can easily chat with other Traders, hear about good futures and the TOD, and reset times.
And lastly, have fun. This IS a game, after all :)
