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Basket Trading

GVCL

Member
Update : 08/10/2011. The latest EA Method is on Page 7.
There is various methods for this system throughout the thread.



Well, I am sure that the old system is posted somewhere here in the Forum, but if not here goes!

I am a basket trader and as such trade from 2 pairs to 14 pairs.

I have noticed that if the EURUSD goes up then there are at least 14+ other pairs that go up.

So, if for example EURUSD goes up then so do GPBUSD, AUDUSD, NZDUSD, EURJPY, AUDJPY, GBPJPY and NZDJPY etc. (Majors)

If you take a basket trade on 1 pair(EURUSD) then you can ultimately take a trade on 14 pairs,

10 pips TP on a 14 Basket can result in 140+ profit.

If you have an indicator that gives you the "sum of" the pairs that you wish to trade, so much better.

Further noticed that the "Offline Basket" does not give you as much noise.

Here is an "Offline" chart indicator that has been around for awhile that you can 'Input" your own Currencies and give you the "sum of" those same currencies.

Place Indi on preferentially GBPJPY as it tends to get the most "ticks",

Select Time Frame, e.g 15 for M15.(If you leave it on "0" TF then it will by default choose the same TF that you put the chart on".
"Basket" input is the pairs that you wish to use. (They can be altered to suite by changing the "Case" pairs in the code)

Go to MT4>File>Open Offline> and look for the file ##T101##M15 etc.

Double click on the required file and the "Offline" chart will open with a compilation of the required currencies.

You can now place conventional indicators on the chart. (Please note that EA,s & Multi TF Indies do not work on Offline Chart)

If all the currencies selected goes up then you should see your Basket chart candles go up and you can place a script to "Buy" or "Sell" the same basket.

If there is enough interest in this thread, then I will place the "Scripts" for Buy,Sell and the relevant mq4,s

EDIT: I have increased my account by a couple of 100% using this system.

Regards
 

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GVCL

Member
I,m sure i will be asked for this good indie.
 

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radicaltour

Moderator
VIP Member
please count me in! I've always had a fascination with basket trading after encountering the ideas from T101 on FF.
The forum would really benefit from your experience in this subject matter. Thank you very much.

The idea that you presented seems to me like buying/selling based on market sentiment: buy euro+aud+nzd (sell usd+jpy) when in Risk Appetite mode and do the opposite when the market is in Risk Aversion mode.
This is just my thought. I would love to hear the details of your methods for precise entry and exit. Thanks again for opening this thread.
 

GVCL

Member
There are many methods to trade the basket.

The system I am posting first is from the original.

In the "T101 Orest" and the "T101 Virtual" indies you will see 14 pairs.
7 Red Sell pairs and 7 Green Buy pairs.
They will remain the same color and not change.

What they will do is move up and down in the column with the price action.

The idea is that when all 7 Green pairs reach the top 7 slots, then we place the BuyAll script.(Buy 14 pairs)
And when all 7 Red pairs occupy the top 7 slots then we will place the SellAll script.

There are various Time Frames, choose the one that works best for you.

The best ones that I found are the W1,D1 and H4.

Before placing the trade consult the Offline chart to check the direction of the candles as confirmation. H1 and H4 work for me.

Please test on Demo first.

Regards
 

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radicaltour

Moderator
VIP Member
thank you, GVCL. I have a few questions I was hoping you can help clarify:
(1) Do you base your entry decision on just the Orest indicator or do you enter only when both the Orest and T101 Virtual Trades indicators agree?
(2) How many times (signals) do you trade per week on average? Can i expect 2 trades per day or more like 4 trades per week max?
(2) What is your preferred exit strategy when in profit?
(3) What is your preferred stop loss strategy when in minus?
(4) do you have other EAs that can manage the whole basket (trailing, breakeven, exiting on TP or SL...)?

It would also be wonderful and helpful if you can let us know when you're planning to buy/sell, just this week, so that we can follow your thought process. This is of course, only if you have the time to do so. Thanks again, GVCL.
 

GVCL

Member
Hi Radicaltour

To answer your first question on Market Sentiment.
Yes it is exactly as you described, i.e buy euro+aud+nzd (sell usd+jpy),
But instead of buying some pairs and selling others at the same time (Some basket traders do), I buy all 14 pairs and visa-versa. The reason being that you will have at least 3 to 4 pairs hedged against the rest, and if the basket turns against you then the Draw-Down will not be so large.
The result is that you will seldom close your trades with all 14 pairs in profit, but will make a few less pips with less risk.

My Entry for this method is based on the T101 Orest W1,D1 and H4.
If at least 5 of the currencies of the same color are at the top, the signal at the bottom of the chart are the same (Short/LONG, then I look at the EURUSD and T101 H1 charts to confirm that the candles are in agreement.(And of course the !14PAIR Indi.)

The EURUSD is important in my trading as I find that the basket follows its lead.(Not always, but most times)

You can also trade only 1 or 2 pairs using the Orest indi.
If for example the GBPUSD is right at the bottom of the column (weak) and starts to move up by 3 slots to 11 (strengthening) on the column, you can place a Buy trade and follow it up, till it starts to move down again and close the trade.H4 column is best for slot trades.(NB the GBPUSD is a Buy pair. If a Red Sell pair is moving up the column then you will place a Sell order)

My SL is normally 30 pips per pair. 14 x 30 =420. I have sometimes closed the trade earlier and other times left it to run longer if I feel that the market is about to turn.
My TP is controlled at random if i am scalping, or by a Profit Lock EA on my longer trades.I often close on a Inside bar.

Of late I have mostly been scalping the baskets by using the above system (Although the above method was designed for longer term) and by a good simple one developed by KOS at FF.

SIMPLE METHOD.

1- Open a GBPJPY M1 chart and a GBPJPY M15.
2- Place the T101 Indy_PriceHistory on the TWO GBPJPY charts.
You will see a Green ##T101## tab at the bottom right of your screen which means the Indi is running.
3- You can select "Basket" to 8 for 8 pairs. (GBPUSD,EURJPY,AUDUSD,NZDJPY,EURUSD,GBPJPY,NZDUSD and AUDJPY.)
or you can select the basket to 14 for the Orest pairs. I trade mostly 8 pair.
Leave the TF on 0 as it will by default select the same TF as the chart it is placed on.
4- Select File > Open Offline > ##T101## and open it.
5- Place the Heiken Ashi Smoothed MTF indi on the Offline chart.
6- Select the Time Frame of Indi to 15.
7- Wait for the HAS to change color to Blue / Red and wait for 5 bars of the same color, then place Buy/Sell Basket trade.

Exit with Profit Lock EA or Inside Bar on M15 Offline chart. You can also exit on a set TP of say 50 pips.

You can also use a M15 Offline chart with the HAS set to 60.etc

Try it on Demo first.

I have placed some pics and the Indies / Script for the simple method.

I closed my first Sell Basket for the week at +150 pips. You can see in the picture that it was a false entry which happens from time to time.
(Luckily it still worked out)

Regards
 

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GVCL

Member
Well now!

Lets see, I have made +550 pips profit this week "Live". 8 Pair simple method. (With minimal screen time)

How much have the other systems made for you?

I am not saying that this system is the know all etc. but what I am saying is that it works.

My DD was the highest that it has been in awhile but hey the circle came back to me.
You often hear about traders that have had huge DD, well that is what happened to me on this peculiar week . (I was able to persevere because of low Lot size.)

The thing about this system is that you eventually get a "gut feel" for it.

My Basket trading friends often end up with +2000 pips for the week.

Regards
 

mirgi

Member
Super very nice system. Can you post some picture offline chart where you start your positions.

Sorry my English is bad. I have problem undersand all about your your system.
 

interpol

New member
hi GVCL,
i read your thread on FF too..
in this forum you're using heiken ashi to scan the trend, then by comparing the two methods which one
work good ?
 

glamstar

Member
Basket trading looks very interesting. Bit confusing. Kindly post of your trade on Monday ie: which pairs bought and sold. No need the entry prices which I will help me understand better. Thanks.
 

GVCL

Member
Sorry for the confusion guys. The reason I posted the first method is so that you can see where the Basket strategy comes from.
I use this system on one of my accounts and the simple method on another.
The simple method gives far more trades.

I posted a pic of Mondays trade in post 7. It is on the M1 Time Frame.
The Yellow Ellipses is my Entry and Exit.
The M1 offline chart works well even in ranging markets.

The 2nd pic in that post is on the M15 time frame and there was quite a few hours of ranging.
I place a horizontal line on the top and one on the bottom of the range.
I then wait for a breakout in either direction.

Regards
 

lerxst

Member
@GVCL

Thanks for opening up this interesting thread regarding basket trading. I've read through quite a few threads on this over at FF and had some questions hoping you won't mind helping with.

With the offline charting of T101 mimicking GBPJPY pair very closely, instead of opening 8 pairs why not just open a buy/sell from the HAS indicator on the GBPJPY pair itself?

Since you open say 8 pairs, and if you do 100 pips each, total that is 800 pips. However, isn't this the same as say the GBPJPY on 8 lots and making 100 pips? After I saw the price comparison of the basket price chart to GBPJPY, what benefit is there to basket trading?

Thanks
 

GVCL

Member
Lerxst,

That is an excellent observation and a question that has been asked many times.
In fact many basket traders use the GBPJPY as their anchor pair for trading decisions of the basket.

If you trade 14 pairs you will notice that there are a few pairs which are hedged against each other, which leads to a lower DD if the trade turns against you.
However it is not so on the 8 pair basket.

I am of the opinion that the basket gives better signals and less noise as apposed to single pairs.
I have personally had more success trading baskets than I have had trading single pairs.

Ultimately i suppose it comes down to personal trading preferences.

The HAS works great on single pairs as well.

Regards
 

lerxst

Member
@GVCL,

Thanks for the reply for your method. Just to clarify, you're using the 1M GBPJPY to generate an offline T101 chart and then you put a 15 min setting HAS on it. Are you still using say 30 pips X 8 = 240 pip stop for this simple method?

Also, if the HAS is set for 15 minutes, while your chart tf is 1, don't u need to wait for 15 bars close before it sets rather than 5?

Appreciate your experience and help

@alpha,

Offline charts is for the indicator to calculate the cumulative values of the various pairs, and plot it on an offline chart so you can see it as a regular chart. That way you know the cumulative trend and movements of the different pairs
 

GVCL

Member
@GVCL,

Thanks for the reply for your method. Just to clarify, you're using the 1M GBPJPY to generate an offline T101 chart and then you put a 15 min setting HAS on it. Are you still using say 30 pips X 8 = 240 pip stop for this simple method?

Also, if the HAS is set for 15 minutes, while your chart tf is 1, don't u need to wait for 15 bars close before it sets rather than 5?

Hi Lerxst

That is correct.

I do not stick to the SL strictly, e.g. If the Majors are in Oversold / Overbought territory or the price is nearing a major Support / Resistance, then I will let the trade run longer. I mainly use the EURUSD H1, H4 chart to determine these levels. (You can even use the H1 or H4 Offline charts to plot these levels as they mimic the Majors)
If the price action is more volatile (Long candles) on EURUSD, then I will close the trade sooner. (And in this instance reverse the basket)

Sometimes I miss the ideal setup and enter a trade in the middle of a movement. I take less profit then.

Yes, you are correct in saying that I should wait for 15 Bars before entering the trade, and I would recommend that new traders to this method do so, but I find that too often I miss out on extra pips. Like I said eventually you get a "feel" for it.

Close attention must also be payed to the Orest and !8 PAIR CURRENCY indi.

I have closed +850 pips for the week so far. ( Had the last 2 days off work)
Although my current running Short basket is 70 in DD. I am sure that the price will still go lower.

Here is some of my trades with sweet setups.
The Orest indi is also a good signal.
I have attached one that I modified.
 

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jyrik

Member
I cant understand what Im doing wrong, when im trying to attach HAS indicator to chart, mt4 just freezes up and crashes for some time and gives low memory error. Any suggestions?
 

GVCL

Member
Hi Jyric

1)Are you only placing the HAS indi on the Offline chart, or do you have other indicators running as well?

2)Also if you have more than 1 Offline chart running then close all the others and only run the 1 that you want to use.(If OK then add more to see how much you can run)

3)Check down in your Expert Tab at the bottom of screen and see what Error you are getting i.e. ##T101## Zero Divide error.
 

jyrik

Member
Hi Jyric

1)Are you only placing the HAS indi on the Offline chart, or do you have other indicators running as well?

2)Also if you have more than 1 Offline chart running then close all the others and only run the 1 that you want to use.(If OK then add more to see how much you can run)

3)Check down in your Expert Tab at the bottom of screen and see what Error you are getting i.e. ##T101## Zero Divide error.
Only one indi and only one offline chrat is running and T101 isnt giving any errors it is saying running and i have the latest mt4
 

glamstar

Member
Basket trading

Basket trading

I have few doubts, hope you can clarify in simple way.

I have two indis orest2 and 14 pair meter.

Is there any pair we should watch particularly? may be GBP/JPY to know the trend?

Orest has divided by 2 (7 pair each)

Do we buy 7 pairs which are in green and sell 7 pairs which shows red?

Or buy or sell all 14 pairs as per the trend of GBP/JPY?

Hope you are write few lines.

Regars.
 

GVCL

Member
Glamstar,

1)The 7 Green Pairs are virtual Buy pairs for that Time Frame. e.g. H1 will give you the results if you had bought the 7 pairs for the last Hour.

2)The 7 Red Pairs are virtual Sell pairs for that TF.


3)If the majority of The Green virtual Buy pairs occupy the top 7 position, then it means that the basket is going up. Therefore you will get a Long Strong Signal at the bottom of the screen. And Visa Versa for Short.

4) If you get a Long Strong signal and you have determined that the basket is going up, then you will place a Buy 14 pair order.( The same 14 pair basket signal works for the 8 pairs)

Hope this helps.

EDIT: Sorry Glamstar, the Stochastic was meant for Jurik
 

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