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Trading on trend of equity – Synthetic Basket trader

Trading on trend of equity – Synthetic Basket trader

The Synthetic Basket Trader trading and analytical system is a universal tool. In addition to creating synthetic baskets for trading in the channel, with this system you can create trending baskets and get a good profit on them!

How is the trend basket of assets compiled?

So, a synthetic basket is made up of at least three different assets, where one asset is the engine that provokes trend growth or decline in equity. The remaining assets create an equilibrium. Thanks to the well-coordinated work of several assets in one basket, we get equity with long trends and pronounced pullbacks. On this trend, trading is much more profitable and safer than on a regular price chart!

In this case, for example, a triangular combination of three currency pairs is used: EURUSD – GBPUSD – EURGBP,

namely:

  • EURAUD – sell
  • GBPAUD – buy
  • EURGBP – buy.

That is, the EURAUD and GBPAUD pairs (pairs with a positive correlation) have a different trading direction. At the same time, EURGBP creates an equilibrium effect. Because the currencies in it (EUR and GBP) are sold. EUR sold against EURAUD and GBP sold against GBPAUD.

It turns out that the currency triangle: EUR, GBP and AUD, which are part of it, pull the force of the triangle in turn in different directions. If we set the lot size for each currency pair according to the value of their point, we would get a horizontal narrow flat. However, we deliberately set the same trading lot size for each currency pair. In this way, we take the basket out of rigid equilibrium and create an artificial trend.

However, we will not dwell on the theory. Let’s go back to practice and consider examples of how to make a profit with the help of the Synthetic Basket Trend complex!

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Examples of trading on a synthetic trend

Start of a trading operation

So, the primary signal for trading is the intersection of a fast and slow line between each other:

  • Crossing up – buy a basket
  • Crossing down – sell the basket

The Take profit level is set at the border of the channel in the direction of trade. That is:

  • for the Buy basket, we set the profit fixing level to the upper border of the channel
  • for the Sell basket, we set the profit fixing level to the lower border of the channel.

The Stop Loss level is set on the opposite side of the channel.

Trades towards the continuation of the trend

So, after the equity line for the “BUYbasket” grows to the extreme upper level of the channel, the Equity Trader utility will automatically close all orders that are inside this growing basket.

As a rule, after this, the equity line drops down to the center line of the channel. At the same time, the moving averages continue to show an increase in the trend. In this case, after the equity line reaches the level for BUY, you need to buy the basket one more time. As in the previous example, we set the profit Fixing level to the highest level of the channel.

As you understand, for a falling trend, the trading rules will act in the opposite sense.

Useful tip:

In order to get a signal about the intersection of moving average lines between each other, activate the corresponding alert in the manual settings of the Synthetic Basket Trader indicator.

Clarification of the signals with the indicator Momentum Equity

We have added the Momentum Equity indicator to the Synthetic Basket Trader software package. It helps us to determine the increase in the strength of the basket’s equity movement. For a trend trading strategy, the Equity Momentum is used as follows:

Make a deal to buy or sell if it is confirmed by the Momentum Equity indicator. For example, for a buy deals, the momentum Equity line has reached the overbought level. This suggests that the strength of the basket’s equity growth has started to accelerate.

Clarification – the main signal for deals is the intersection of moving averages with each other. The Momentum Equity signal is only a confirmation signal. Therefore, first you need to wait for the signal about the intersection of the moving average lines between each other and make deals after receiving confirmation from the Equity Momentum indicator about the acceleration of the trend.

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Ready-made synthetic baskets

To make the use of our complex easier and more convenient, we have prepared several ready-made baskets for you. Use them and make a profit!

Each buyer receives a portfolio of ready-made files for automatic creation of trend baskets.

How to use set files?

After you download the archive with automatic settings, unpack the contents of the archive to the root directory of the MT5 platform.

Open the “File” tab and select “Open Data Folder”:

Unzip the archive to the Presets folder:

Open the manual settings of the Synthetic Basket Trader indicator and click the “Load” button. In the “Presets” window that opens, select the set file you need and click on the “Open” button:

After loading the automatic basket setup, the indicator will calculate the portfolio change based on historical data. In a separate window, the basket equity line will appear, where you can receive signals for this trading strategy.
In the same way, load the same settings for the utility’s Equity Trader. Thus, the indicator and the utility will be configured to trade on the same basket of assets.

IMPORTANT! The Synthetic Basket Trader indicator and the Equity Trader utility should always use the same settings!! Follow this rule carefully! Use the same set file to configure the indicator and the utility!

How to create my own Basket?

To create a synthetic basket for trading on the trend, enter the names of the assets from which you want to create a basket in the settings of the Synthetic Basket Trader indicator. Also, specify the direction of their virtual trading and the size of the virtual trading lot.

When setting the start date for creating an equity basket, keep in mind that the technical capabilities of the software are not unlimited. The longer the evaluation period you set, the more difficult it will be for the Synthetic Basket Trader indicator to count the results of the basket and create its equity line.

We recommend:
• for the M1 timeframe, use a period of no more than 1 month
• for the M5 timeframe, use a period of no more than 2 months
• for the M15 timeframe, use a period of no more than 3 months
• for the M30 timeframe, use a period of no more than 3 months
• for the H1 timeframe, use a period of no more than 4 months
• for the H4 timeframe, use a period of no more than 6 months

Ideally, your equity chart should make long movements in the direction of growth and in the direction of decline. In simple words – long long waves on which you will trade and collect profit in the future. This result can be achieved by changing the list of basket assets, the direction of their virtual trading, and changing their trading lot. 

Change the size of the levels for analysis and profit fixing so that the extreme limits of the channel are located on the edge of the volatility channel of the equity line.
Set the MA period in such a way as to get a horizontal trend for the longest range of movement of the equity chart. The longer the MA period – the more horizontal the channel will be.
To receive signals when the equity line touches certain channel boundaries (central level or channel boundaries), set the alert in the indicator’s manual settings. Set the number of the level at which you want to receive the signal.

After you create a graph with a trend movement of equity, you will save the settings of the indicator in a file for automatic configuration. Apply this file to the settings of the Equity Trader utility. Thus, the settings of the Synthetic Basket Trader and the settings of the Equity Trader will be identical.

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IMPORTANT! The Synthetic Basket Trader indicator and the Equity Trader utility should always use the same settings!! Follow this rule carefully! Use the same set-file to configure the indicator and the utility.

Also, use different magic numbers for each basket so that the utility can identify open orders. That is, to determine which basket they belong to!

Ride the trend and get a profit with the help of Synthetic Basket Trader!

Full package
*Unlimited number of accounts with the users name
€ 199
  • Analytical Complex - Synthetic Basket Trader
  • Utility for trading - Equity Trader
  • Indicator - Momentum of Equity
  • Indicator - iStock Correlation
  • Ready-made baskets for trading
  • Technical support
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Economy package
**One trading account
€ 159
  • Analytical Complex - Synthetic Basket Trader
  • Utility for trading - Equity Trader
  • Indicator - Momentum of Equity
  • Indicator - iStock Correlation
  • Ready-made baskets for trading
  • Technical support
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*Unlimited number of accounts with the username – the product will work on any number of accounts that are opened personally by the buyer (the product is linked to the buyer’s name).

**One trading account – the product will work only on 1 trading account, the number of which the buyer informs us to obtain a license to use the product (the product is linked to the account number).

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