basket trading strategy

Trading strategy on the trend of synthetic equity

So, with the help of the Synthetic Basket Trader indicator and the Equity Trader Expert Advisor, you can create a virtual trading space in which it is much easier and more efficient to make a profit than during classic trading.

basket trading strategy

With the help of the Synthetic Basket Trader indicator we can:

  • Сreate virtual baskets of assets that are characterized by long trend movements with minor pullbacks. Such portfolios have little volatility, their movement is easy to analyze.
  • Determine the moments of trend change and its new direction. The entire process is displayed on a special graph. You can visually observe and understand which way your basket of orders is moving.
  • Determine the trading goals on which you need to set the Take Profit and Stop Loss levels.
basket trading strategy

With the help of the Equity Trader utility, we can:

  • Simultaneously open entire baskets of orders (up to 16 orders at once). The Expert Advisor executes a lot of trading orders in 1 second, which is impossible to do manually.
  • Effectively manage open baskets of orders. The money management and visualization system will make your trading simple and clear.
  • Set Stop Loss and Take Profit. This allows you to reduce losses in time and earn maximum profit.

How does Synthetic Basket Trader work?

Real Trading with Synthetic Basket Trader

So, with the help of the Synthetic Basket Trader indicator, you can create a basket of assets with different trading directions and different sizes of trading lots.
Thus, you can independently create balanced trade and investment baskets, the movement of which is much easier to analyze.

Creating a portfolio of various assets

The Synthetic Basket Trader indicator creates a virtual chart of the equity of the created basket

With the help of technical analysis tools, we control the moments of trend change, the pullback of the equity line, and the achievement of maximum oversold/overbought moments in the synthetic portfolio. We can receive PUSH and email notifications about changes in the virtual basket equity.

With the help of the Equity Trader Expert Advisor, we buy and sell baskets (up to 16 orders at a time), set trading goals, Stop Loss and Take Profit, and control the trading process.

Now for more information about how it works and how you can make money on it…

How to create a synthetic asset basket

So, let’s start by creating a basket of assets, the equity chart of which you can analyze and identify the most suitable moments for trading.

But first of all, we publish sets of set files for buyers to automatically configure the Synthetic Basket Trader indicator and the Equity Trader Expert Advisor. With these set files, you can create ready-made asset baskets for trading on market trends. How to use these set files-read below.

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If you decide to create your own portfolio, then you need to do the following:

Set the names of trading assets, the direction of trading and the size of their trading lot in the indicator settings:

  • Set the period of the moving average, which will show the global direction of the basket you created.
  • Set moving average levels that will help you analyze the dynamics of changes in the basket of orders for intermediate and final trading goals:

If you want to get an alert when the equity line reaches a certain level on the equity scale, activate this function in the manual settings of the indicator. Set the number of the level that you want to get an alert when you touch it and activate this alert in the manual settings of the indicator:

Set the display period for the Bollinger Bands indicator. This indicator will help you determine the dynamics of short-term changes in the equity of your basket of orders.

If you want to get an alert about a trend change (the intersection of the global Moving average line and the central Bollinger Bands line) – activate this function in the manual settings of the indicator:

If you want to get an alert about a trend change (the intersection of the global Moving average line and the central Bollinger Bands line) – activate this function in the manual settings of the indicator:

Set the start time for analyzing the dynamics of changes in the equity of the basket of orders you created. We strongly recommend that you specify an adequate start date for the analysis.

  • For the M1 timeframe , the analysis period is no more than a month
  • For the M5 timeframe – a period of no more than 2 months
  • For the M15 timeframe – a period of no more than 4 months
  • For the H1 timeframe – a period of no more than 8 months
  • For the H4 timeframe – a period of no more than 12 months

If you set larger periods to start the analysis, critical errors may occur in the Synthetic Basket Trader indicator. The thing is that brokerage companies often provide a history of quotes with some inaccuracies (several bars of quotes may be missing). Accordingly, on large periods, the number of such gaps accumulates and the indicator cannot correctly calculate the equity of virtual orders and will start making errors. This can lead to incorrect display of the basket’s equity and incorrect operation of the Equity Trader Expert Advisor.

So, after you create your own portfolio of virtual orders, save these settings as a separate set file.
Next, move the Equity Trader Expert Advisor to the quote chart. This Expert Advisor should be located on the quote chart where your virtual portfolio is located.
Apply the set file with the settings that you previously saved to the Equity Trader Expert Advisor.

In simple words, the Synthetic Basket Trader indicator and the Equity Trader Expert Advisor should have the same settings. Their work should be synchronous and identical.

If you are using our set files, which you can download above on this page, then apply the set file of the basket selected for trading for the Synthetic Basket Trader indicator and for the Equity Trader Expert Advisor.

Trading Functions

So, after that, you installed the indicator and the Expert Advisor on the quote chart and created a virtual environment for trading. Now let’s take a closer look at how to trade and make a profit:

The first signal for trading is the crossing of moving averages

After the moving averages on the equity chart of the virtual basket intersect with each other, a corresponding alert will appear. This signal means that the trend of the virtual basket has started to change and you need to buy a basket with the corresponding direction.

If the fast equity line crosses the slow one from the bottom up, then the equity trend of the basket of orders begins to grow – you need to buy a basket:

If the fast equity line crosses the slow one from top to bottom, then the equity trend of the basket of orders begins to decline – you need to sell the basket.

If the equity line has moved too far after crossing the moving averages, you can wait for it to roll back to the area most favorable for making a BUY or SELL.

When the trend continues, the equity line of your virtual basket will roll back from time to time to the area of the central level. Use this moments for new deals. At the same time, set the profit-taking level to the extreme upper and lower levels of the price channel.

The level of fixing the loss must be located at the opposite level of the channel. This level will act as an emergency loss reduction if the market begins to experience emergency circumstances and your basket of orders begins to actively change in a losing direction.

Also, we recommend to use the forced fixation of the result at the opposite intersection of the moving average lines. In this case, you will fix the loss even before the equity line falls to the Stop Loss level. Immediately after that, make a trading operation in the opposite direction and set new profit fixing levels.

Use the buttons on the panel of the Equity Trader Expert Advisor to set profit and loss levels. To set profit and loss fixing levels, use the corresponding column on the trading panel of the Expert Advisor:

  • For BUY baskets, the level above zero should be understood as the Take Profit level. Levels below zero – the level of Stop Loss.
  • For SELL baskets, the level above zero should be understood as a Stop Loss. Levels below zero should be understood as Take Profit.

The task of these buttons is simple – You look at the dynamics of price movement and determine where you plan to fix the basket’s profit, and where you want to stop losses.

Attention – after you set the profit and loss fixing levels, it is strictly forbidden to change the settings of the indicator and the Expert Advisor.

Also, it is not recommended to change the timeframe of the quote chart on which the Expert Advisor and indicator works. If you change the timeframe, all the profit and loss fixing levels you set will be annulled. If this happens, set these levels again!

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