Basket Trading - best practices

jacekchromiak
Trader
Posts: 13
Joined: Sun Oct 28, 2018 9:53 am

Basket Trading - best practices

Post by jacekchromiak »

Hi All,

Basket Trading... - since I remember, I have never known what is mean - Basket Trading ? What is exactly BT ? Is this money management or maybe it is kind of trading strategy. I have searched in many places some definition of BT but to be honest I have never seen any interesting article which can briefly explain - what is Basket Trading ?

Reading some posts on the FF and here I have realized that Basket for each trader means something else, so maybe it will be good idea to try it and define my own understanding of basket trading. Few months ago I have started to trade with focus not on the specified trades but on the complete basket and result which is generating. Using conventional trading strategies and money management methods I was not able to stay in market longer than 1 month. My trading was full of not necessary stress.

3 weeks since I have started to trade, my basket has ~350 opened trades (on all possible currencies and indexes) and ~120 pending orders. At that time market moved smoothly in one direction for 2 weeks. Its amazing to observe how Your basket increasing all the time. After 4 weeks I have realized that something is going wrong with my pool of opened trades... basket growth was not stable (if I could say like this). I have reviewed multiple times all positions but it was really hard for me to identify what exactly generating decrease of my capital. When You see so many opened running trades its hard to have an overview about this what is going on with Your basket and till when it will grow up. Then I understood that Basket Trading is not so easy as I thought and to manage it I need to some advanced tools. After one month I have started to use MPTM from Milanese, basket was growing at that time so I have succesfuly increased Basket TP parameter. This was fine till some moment. Soon or later its coming time when You have to focus not on the basket with all trades but on the specified trades and control positions for specified instrument.
At this time my basket has been divided to multiple small baskets (I mean - one currency = one basket) with multiple trades (include hedging) some times >25 trades per currency. This was result of four weeks of trading without SL and TP but still I was in profit without any sensible idea (except "close all") what to do next with this amount of trades.

In this topic I would like to start discussion about Basket Trading (I hope its not duplicate) as a strategy and kind of money management model (both). Also if possible I would like to gather some existing tools for BT and propose some new ones (maybe somebody will be able to help here).

Does any one of You using basket trading as a method/strategy of trading ?
If Yes, what kind of tools You are using to manage big amount of trades ? How You are calculating Basket TP ?

It would be great to hear some opinions from experienced users.


In the attachment You can see some statistics of my first basket.
mm2.JPG

Greetings
Jacek
You do not have the required permissions to view the files attached to this post.
User avatar
SteveHopwood
Owner
Posts: 9754
Joined: Tue Nov 15, 2011 8:43 am
Location: Misterton - an insignificant village in England. Very pleasant to live in.

Basket Trading - best practices

Post by SteveHopwood »

jacekchromiak » Mon Nov 12, 2018 9:25 pm wrote:Hi All,

Basket Trading... - since I remember, I have never known what is mean - Basket Trading ? What is exactly BT ? Is this money management or maybe it is kind of trading strategy. I have searched in many places some definition of BT but to be honest I have never seen any interesting article which can briefly explain - what is Basket Trading ?
Basket trading means that the fate of an individual trade does not matter. It is what happens to an overall group of trades that matters. There are two kinds of basket trades:
  • Single pair baskets: each trade on a chart belongs to its own basket, with its own target take profit and back up stop loss.
  • Whole position baskets: each trade open belongs to a single basket, regardless of the chart it was generated on. These whole position baskets have their own take profit and back up stop loss.
It is possible to combine both of the above.

Stop losses and basket trading do not go together. The stop loss will always be hit a long time before the markets recover in our favour.

This will be my one contribution here. Frankly, I would have thought that the concept of basket trading were obvious. I will not engage in discussion.

Good luck in your trading.

:xm: :rocket:
Read the effing manual, ok?

Afterprime is the official SHF broker. Read about them at https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?p=175790#p175790.

I still suffer from OCCD. Good thing, really.

Anyone here feeling generous? My paypal account is always in the market for a tiny donation. [email protected] is the account.

To see The Weekly Roundup of stuff you guys might have missed Click here

My special thanks to Thomas (tomele) for all the incredible work he does here.
User avatar
tomele
Administrator
Posts: 1166
Joined: Tue May 17, 2016 3:40 pm
Location: Germany, Forest of Odes, Defending the Limes

Basket Trading - best practices

Post by tomele »

jacekchromiak » 12 Nov 2018, 22:25 wrote:3 weeks since I have started to trade, my basket has ~350 opened trades (on all possible currencies and indexes) and ~120 pending orders.

...

At this time my basket has been divided to multiple small baskets (I mean - one currency = one basket) with multiple trades (include hedging) some times >25 trades per currency.

...

Does any one of You using basket trading as a method/strategy of trading ?
If Yes, what kind of tools You are using to manage big amount of trades ? How You are calculating Basket TP ?
I stumbled over this tonight. Here are some of my thoughts on it.

350 open trades and 120 pending? Besides the fact that resonable brokers like GP would never allow you such an amount of trades, did you ever imagine the risk of your strategy? As long as you don't have a sophisticated portfolio management in place, this can kill your account faster than you can say "Oops".

Basket trading might seem to be a game of having as much trades open as possible. It is not. It is a game of balancing your exposure to several currencies with respect to their strength. Figure this out for yourself.

Cheers
Thomas
Happy pippin, Thomas :-BD

It ain't what you don't know that gets you into trouble.
It's what you know for sure that just ain't so.
(Mark Twain)

Keep the coder going: Donate
jacekchromiak
Trader
Posts: 13
Joined: Sun Oct 28, 2018 9:53 am

Basket Trading - best practices

Post by jacekchromiak »

tomele » Mon Nov 19, 2018 12:46 am wrote:
I stumbled over this tonight. Here are some of my thoughts on it.

350 open trades and 120 pending? Besides the fact that resonable brokers like GP would never allow you such an amount of trades, did you ever imagine the risk of your strategy? As long as you don't have a sophisticated portfolio management in place, this can kill your account faster than you can say "Oops".

Basket trading might seem to be a game of having as much trades open as possible. It is not. It is a game of balancing your exposure to several currencies with respect to their strength. Figure this out for yourself.

Cheers
Thomas
Hi,
I`m Alpari ECN Pro user and to be honest till now I havent seen any limit of opened positions or pending positions. One limit is Your account, so if You have enought money You can open much more trades/pending orders than on normal account. In did, there are a lot of limits for example on nano accounts where You are allowed to open maximum 25 trades (its crazy), so in my opinion peny trading not always make sense a specialy if user doesnt have enought experience because in basket trading ability to hedge is one of the most important things. About killing account -hmmm... it depends what do You mean account ?

If You are basket trader You are focus not on the account but baskets. Let say every time when I`m starting new run I`m creating account with 10 000$. Depends on Your skills, this account is devided for 3 or more smaller baskets, so actually I`m not trading with 10 000$ account but with 3330E - this is my starting basket. So 6660$ (2 baskets) I`m reserving in case of some incidents to keep my trades running. From time to time, I need to pay in some money to keep my trades open a specialy if I will do some mistakes and I would like to keep all my trades open without hedging. Its not often but every two,three investing sessions (I mean every time when I`m starting new baskset) I need to react this way - I`m making mistakes like an each trader. So we can say that I`m risky all the time 1-2 baskets. If You would like to reduce Your risk, You can start with for example 2000$ or 1000$ baskets with keeping in mind - limits of the accounts. For me comfortable is basket with 3300-8000$. This allowed me to open a lot of positions (also automatic) and sleep well.

The big advantage of basket trading is sensible time which You need to generate profits (also losses if You are not experienced). The worst thing is to know, when to close basket, so I`m using MPTM with static rules - close all at 500-1000$ in profit - depends on the trading day. Usually I`m opening trades on all currencies where spread is not higher than 5 pips - this is quite normal for ECN accounts - and where I see some possibility for long term (4h-24h or more) movement.

The most of the trades, I`m opening automatically base on this what is happening on the 4H and 1D chart. This giving me high probability to open proper trades. After 2-6h usually I see if I have opened trade in good direction or not. If yes and I see some price movement and profit, I adding next trade. Usually after 2-6 hours basket starting to balance losses with profits. At this moment I`m starting to observe and "clean" my trades.
As I said I`m opening my trades using 4H chart - in this strategy each trade is really small (because is opened automatic) - 0.01 lots. To open initial trades I`m using some simple EA. EA checking conditions on all charts and triggering open trade process - after 2minutes EA is disabled and MPTM observing my basket for the next few hours.

Cleaning basket - this is kind of closing and opening new positions. How I`m doing this. If I see that my position is going in the wrong direction I`m checking what is going on on the 15m chart. Usually I see that one or 2 trades with size 0.01 are some pips in minus. If You have some experience and You know how to scalp You can close both minus positions by scalping in oposite direction. With ECN account its quite easy because as I said usually I`m focus on the currencies with maximum spread 5 pips - this giving me possibility to scalp in oposite direction and close trade with small loss or profit. Once is closed currency is excluded from the basket and waiting till next basket will be open. if something is going in profit I simply adding new position. If basket TP is setup on the proper reasonable level, You can make profit quite often.

If this post interesting some one, in the next post I can describe in detail how I`m trading basket manualy with pending orders.

Regarding reasonable brokers, if broker limiting number of open positions - hmm... then trading is really difficult and I`m trying to avoid this kind of accounts or brokers. In my opinion in this game the main role plays "MONEY". If Your account is big enoght - why broker should not allowed You to open more trades ? Is this reasonable broker ? I have nano account where I can open max 25 trades, but I have possibility to trade on 30-40 different instruments - why this number is reduced to 25 ? In trading You will always have good and bad trades, the secret is to open more good trades than bad - if I`m not allowed to open trades because Broker limiting me - is this reasonable broker ?

Regarding risk... no risk no fun. But if You use helmet You can have low risk and big fun ;).

Viele Gruesse aus Deutschland :)
billv
Trader
Posts: 283
Joined: Fri Apr 13, 2012 1:57 pm

Basket Trading - best practices

Post by billv »

jacekchromiak » Mon Nov 26, 2018 12:32 am wrote:
Hi,

If this post interesting some one, in the next post I can describe in detail how I`m trading basket manualy with pending orders.
Hi,

I'm interested in your basket trading approach so please keep posting.
It is true that some brokers restrict the number of open demo trades but this restriction only applies to demo clients. If you have a live account with them the rules are totally different.

Greetings from Down Under :hi:
User avatar
SteveHopwood
Owner
Posts: 9754
Joined: Tue Nov 15, 2011 8:43 am
Location: Misterton - an insignificant village in England. Very pleasant to live in.

Basket Trading - best practices

Post by SteveHopwood »

billv » Sat Dec 01, 2018 1:15 am wrote:
Hi,

I'm interested in your basket trading approach so please keep posting.
It is true that some brokers restrict the number of open demo trades but this restriction only applies to demo clients. If you have a live account with them the rules are totally different.

Greetings from Down Under :hi:
A word to the wise - or someone who is supposed to be amongst that group at SHF that is supposed to be wise.

The OP is clearly a certifiable nutter heading hot-foot to an SHF ban. Best not to get involved.

Why have I not deleted this ludicrous thread? Because I can occasionally get thingies wrong and so leave it for more intelligent people than me to comment.

They had better do so soon because I think the OP is an idiot and this thread is one more irritating post away from extinction. I am this forum's owner and read everything posted here, so imagine how much I enjoy having my time wasted.

As always, I am open to members telling me why I should leave this thread open. Just not by the OP, whose best interests are served by staying quiet.

:xm: :rocket:
Read the effing manual, ok?

Afterprime is the official SHF broker. Read about them at https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?p=175790#p175790.

I still suffer from OCCD. Good thing, really.

Anyone here feeling generous? My paypal account is always in the market for a tiny donation. [email protected] is the account.

To see The Weekly Roundup of stuff you guys might have missed Click here

My special thanks to Thomas (tomele) for all the incredible work he does here.
billv
Trader
Posts: 283
Joined: Fri Apr 13, 2012 1:57 pm

Basket Trading - best practices

Post by billv »

Hi Steve

I didn't reply initially to this post because I didn't feel that I had something to contribute.

As you know there are many ways to trade and people often do crazy things on demo.
I don't do such things because I concentrate on the higher probability options
but I find it interesting to read what other people do in trading and particularly in regards to basket trading.

I found interesting his comment that he scalps against losing trades.
This is something I have not done because I did not have the need to do it
but any technique which gets rid of losing trades could be useful to someone else who is trading purely baskets eg C1borg and perhaps others.

If a thread annoys you, why don't you move it to the rookie section or create a section for crazy ideas?
The forum is normally very quiet and IMO a bit of fun wouldn't hurt :)
User avatar
SteveHopwood
Owner
Posts: 9754
Joined: Tue Nov 15, 2011 8:43 am
Location: Misterton - an insignificant village in England. Very pleasant to live in.

Basket Trading - best practices

Post by SteveHopwood »

billv » Sat Dec 01, 2018 2:36 am wrote:........ or create a section for crazy ideas?
The forum is normally very quiet and IMO a bit of fun wouldn't hurt :)
Brilliant idea. :clap: :clap: :clap: :clap: It is beddies for me now, but I will act on it in the morning.

:xm: :rocket:
Read the effing manual, ok?

Afterprime is the official SHF broker. Read about them at https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?p=175790#p175790.

I still suffer from OCCD. Good thing, really.

Anyone here feeling generous? My paypal account is always in the market for a tiny donation. [email protected] is the account.

To see The Weekly Roundup of stuff you guys might have missed Click here

My special thanks to Thomas (tomele) for all the incredible work he does here.
jacekchromiak
Trader
Posts: 13
Joined: Sun Oct 28, 2018 9:53 am

Basket Trading - best practices

Post by jacekchromiak »

billv » Sat Dec 01, 2018 1:15 am wrote:
jacekchromiak » Mon Nov 26, 2018 12:32 am wrote:
Hi,

If this post interesting some one, in the next post I can describe in detail how I`m trading basket manualy with pending orders.
Hi,

I'm interested in your basket trading approach so please keep posting.
It is true that some brokers restrict the number of open demo trades but this restriction only applies to demo clients. If you have a live account with them the rules are totally different.

Greetings from Down Under :hi:

Hi,

well... the limit of course exists (technical limit for example or deposit limit). If broker play not fair, I`m not playing at all, so usually I`m focus on the trusted brokers. For me its important to have bigger pool of trades which I can open. Thats all.
jacekchromiak
Trader
Posts: 13
Joined: Sun Oct 28, 2018 9:53 am

Basket Trading - best practices

Post by jacekchromiak »

Before this post will be classified as an "idiot post" and locked, maybe some one could advise me.

Do You know any script which will display button "Close all", to close all trades for the current chart ?

Few times per day I review my trades and some times I need to react fast. I have some scripts to close all opened trades for the specified currency but usually it is not closing all trades (a specialy when market is moving fast). Only MPTM "Close All" button working as expected but it is closing all opened trades (I mean trades for all pairs) - its really do what it supposed to do (well coded).

I will appreciate any help.

Cheers
Jacek
You do not have the required permissions to view the files attached to this post.
Post Reply

Return to “Trading Psychology & Money Management”