How does trading work?

[Amazing Mr. X]

I have a Lakon Type-6, a fuel scoop, at least 200k in spending money, and a deep desire to try out this unbelievably profitable trading thing everyone keeps talking about. I'm aiming for an ASP with a maxed jump drive, and I'm starting off in Luyten's Star.

I'm not getting off to a totally cold start here, I've tried a little bit. Though I clearly haven't been doing it right, at all, because my profits have been absolutely abysmal.

So, if any of you could tell me how to do this trading thing right, I'd appreciate it.

Seriously, I'll take any advice you can give me.
Any advice.
Literally, any advice.
Please, help me.

 

[Darkwolf]

Extractions produce goods for Refineries
Refineries produce goods for Industrials
Industrials produce goods for High Techs
High Techs produce goods for Agriculturals
Agriculturals produce goods for Extractions

There are of course materials that skip that, or go backwards in that line (eg, some ores come from Extraction but are largely sold to High Tech), but that'll give you the idea. Record items that are at high supply in one place and in high demand at another, and go to it.

Oh, and don't buy cargo that'll dip you below your rebuy cost.

 

[Cybermykl]

Like he said and I would add...upgrade your cargo holds to maximum and if trading is your goal, get rid of the fluff and add more cargo space. A Lakon has deep cargo holds or the potential for deep holds. So, take advantage of the cargo upgrades. Personally, I'm trading gallite to one system for 600 cr per unit ton profit and in return trading auto processors for 900 cr per ton profit. You do the math, round trip, I'm making 1500 per ton profit x my cargo space which is 38 tons right now and that in a Cobra. Good luck Commander.

 

[kamenjar]

Industrial stations are pretty much a dead end. Try transport goods with 5k+ value to stations that need them. To start, maybe high tech to extraction and back.

Also from my FAQ:
Trading/Navigation
Dealer: I can't find a good trade route! Help me!
The best trade rouites require 18 LY or more. If you look at the trrade routes on the map, you will see all the routes that NPC traders exhaust for you and drain profits. Use the trade routes to find where goods are NOT delivered. For example, find a large Extraction economy that has no 7k+ medicines or appliances.

A good trade route will net you 2k+ profit per tonne round trip. For even larger profits you may have to jump twice from station to station.

 

[changtau2005]

If money motivates you, trading is the way to go. Trading is buying low and selling high. It's as simple as that. The trick is to find the lowest of the low and the highest of the high. Some people use trading tools to help them find that, that's fine, but you will get an average profit running those at best. The more supply and demand gets satisfied, the smaller the price difference gets, and the lower your profits get. That happens faster when more people run the same route, and that's what you get for using a route finder. It's a viable option, but it's not the fastest.

Generally, the more expensive the good is, the larger the potential profit margin, but it also means you take on more risk. Should you lose a shipment of cargo, expect to haul between 8 to 10 runs just to recoup your loss.

When I started out in a T6 like you, all I did was find myself a corner of the galaxy free from competing traders and pirates, and settled on an okay route, 1000Cr/t one way, 900Cr/t the other (Cr/t means credits per ton). That's all you really need. Scout out the nearest systems, buy trade data, take notes. Some players think trading is boring, I disagree. During those seconds between jumps, during refuel, during station approach, open the galaxy map (do fly carefully) and scout out your surrounding systems. Find sources and sinks, plot potential routes, and try them out.

Once you get some experience under your belt, you know which goods are best to trade with, and you know what systems to look for. The good routes that give 1.3k each station stop (mean average) become quite easy to find, with a little luck. There are ways to "cloak" your trading activity from trade data so it doesn't give other traders (and pirates) a clue as to what you are trading. The best routes aren't routes. They're networks. If a supply node fails, if demand fails, your profits are resilient. Lesser traders move away (great! less competition) because they think the area is no longer profitable. Trading is about knowing more information than others, about going against the flow, against what the majority are doing. But, when you're just starting out, don't sweat the details and just find a two-station loop that gives you the kind of money you want.

You will develop your own trading style over time, but that's some of what I learned along the way. Trading brought in 460 million credits for me, so now I'm pretty much financially free, but I still trade because I enjoy it.

 

[mh-sabre]

Found two stations within 100 ls from the nav point, high cost metals one way 1000 per tonne, lower profit on the return, could only get 200 for the return, but the round trip was incredibly quick as there was little travel time.

They also threw in haulage contracts to each station, which was helpful.

The prices were high as a consequence of the civil war raging, I believe. So it can also be economic factors and locality of stations that help. The round trip was possible but to put the third step into the trading route meant going to a station that was orbiting at a great distance from its sun. It also helped that one was a platform which meant docking was quicker.

 

[talharbash]

Look at the trade routes and trade data. You'll find trade routes end and their origin still has lots of supply. Look for what else down that route has demand. Profit!

Buy trade data to see all the trade routes properly.