REAL GE Investing Guide

[i_love_burritos]

This is about a third of the guide. Please post, to tell me if you like it. The rest is coming soon, within 3 - 4 days.

 

 

 

GE Investing Guide Real Principles / Real Information

 

 

 

Before We Begin

 

Hello Fellow Tip.it'ers, this guide is intended to teach you how to invest

 

properly in the GE, I will be using example from real sharemarket analysis to teach you.

 

Remember to be sucessful in trading in the GE, you must understand real concepts and real

 

analyzation techniques.

 

 

 

Please note that I use the term "share" liberally, which actually means item/ good

 

in RS.

 

 

 

The guide wil be in two sections, which I'll summarise here quite quickly.

 

The first section will talk about concepts regard trading and economics ,and the second

 

section will be about trading in the GE.

 

 

 

Lastly, I plan to make this guide as sweet and short as possible, if you can understand it all,

 

(which all you tip.it'ers should), it wont take you long to digest the information.

 

 

 

ALSO

 

 

 

Please remember that RS has many differences form the real world,

 

 

 

* There is no portfolio, and your portfolio may be considered as your bank.

 

 

 

* There is only ONE type of asset, material goods, halfway between shares and property, there is no capital, no bonds, no hedge funds.

 

 

 

* No privatley listed companies, there is only you, the GE and other players.

 

 

 

* No paticular internal factors that influence prices, occaisonly there may be a new item release or a major update, and these dont come very often.

 

 

 

* In the real world there is no RARITY, excepet in limited sectors such as fine art or antiques there is really no market.

 

 

 

* The issue of XP is a large driving force behind the GE,that is why a gold bar is worth much

 

less than gold ore. In the real world, it is the other way around.

 

 

 

What To Consider In An Investment

 

 

 

* Return on an Investment

 

*Security

 

*Minimum Investment Amount

 

*Liquidity of the asset

 

* Risk

 

 

 

Return on Investment will usually be in the form of a return based on the

 

exchange price and the PE ratio (explained later) of the item. Sometimes the value

 

will be capital growth, where the price increases over time.

 

 

 

What is capital growth ?

 

It refers to the increase in the value of the of the amount of money you have

 

invested. Returns can only be gained when you sell your invesment for more than

 

the purchase price, ( Yes obvious I know, but it needs to be explained.)

 

 

 

The main benefit of this type of investment is that it acts as a buffer against

 

inflation i.e. rising prices of various goods. By keeping your capital ahead of the

 

infaltionary rate you can prevent, the value of your money from eroding and increase

 

your spending power.

 

 

 

Capital growth occurs through rising value of your goods, and increased rarity of items.

 

 

 

The Golden Rule

 

 

 

Buy Low, Sell High,

 

 

 

However therein lies difficulty (original term is rub, but who cares, I don't like Shakespeare.)

 

 

 

How do you know if prices will rise?

 

Should I hold on for just a little longer?

 

How Much Should I buy.

 

 

 

The Four Fundamental Questions

 

 

 

What Should I buy?

 

How Much Should I buy ?

 

How long should I keep it for ?

 

Is it stable/volatile ?

 

 

 

Technical Analysis

 

 

 

[hide=Technical Analysis]Technical analysis is the study of the past price movements of an individual share . Charts are the key tool used in technical analysis.

 

The argument in support of technical analysis is that all buying, selling, rumours, and information is going to be factored into the price of a share as people act on that information.

 

 

 

The first benefit that charts provide is the ability to convert a table of data into an easy to interpret line graph.

 

The graph provides a quick snapshot of how a share price has travelled over the recent past.

 

 

 

By looking at the prices we can see whether there is good news associated with a good resulting in people buying the good and rising prices. We can also see if bad news has come out, or if it's expected to be released because sellers will come into the market and push prices lower.

 

 

 

Uptrend

 

 

 

Notice that each subsequent high is higher than the previous high, while each subsequent low is also higher than the previous low. This is how an uptrend is defined. You must have higher highs and higher lows. You need both to have an uptrend. If you do not have both a higher high and a higher low you do not have an uptrend. You might not have a downtrend either. Let's look at the alternatives.

 

 

 

 

 

 

Downtrend

 

 

 

The definition of a downtrend is lower lows and lower highs. If you look at the diagram you can see that each high is lower than the previous one and each low is lower than the previous one.

 

From a technical analyst's perspective you are losing money if you purchase goods that are in a downtrend. Markets however are not as simple as the diagrams and there are periods when the market is neither in an uptrend nor a downtrend.

 

 

 

 

 

 

Sideways Trend

 

 

 

In the diagram prices never reach a point where there is a higher high and a higher low. After the market registered the second higher high, notice that the market then made a lower low. There is neither an uptrend, nor a downtrend, the market is merely trading sideways with little indication of clear direction.

 

 

 

[/hide]

[xcowx]

It's an OK guide though many guides explain this very same concept better. I think the line of GE investment guides have pretty much reached their limits and have only room for minor tweaks, adjustments. In my opinion, it's not worth it for you to write a guide like this purely just because at this point, there are so many guides that are the same out there. It's more of a popularity contest.

 

 

 

With this said, the guide is good. Well written, no claims of a wonder-item that will make you rich in seconds, so that's always a plus. Just too generic. I think the topic just doesn't allow you to create a very unique guide. Sorry if the criticism was a bit too harsh, just giving you my bit on the guide. I think for someone new to investing or GE merchanting it would certainly help them understand the basics of working the market.

 

 

 

--8/10--

[Cup Lion]

I like it so far. I really want to read the rest, though. I've always been interested in investing.

[Lore]

Great guide imo.

 

 

 

It's nice to see the concepts behind investing.

 

 

 

It's also nice to see a fellow watchmen fan.

[opeious]

 

Do you see an emerging trend the points (marked with white circles) is the point the Daily and the 5 day averages intersect each other. When they 1st meet each other the price rises when they meet again the price falls. I've been using this since a very long time have made loads of GEPEE :P

 

 

 

(Method not invented by me, a guide came up about it some months ago, can't remember the author)