Sorry felixis for the late reply, as I just came back from holiday.
This effect is minimized since we are using M1 to generate the basket history. However after completing the history, the basket is updated every 2 seconds which is very close to live Tick Date.
Lot size can be normalized by using the Tick Value for each pair.
Yes. Equity should go up or down following the basket chart, but not in exact pips.
All these are normal conditions for trading multiple currencies and hence they apply to the basket. No harm in that.
Inverse of the -ve directional pairs seems to be the only available solution so far. Pips (or Tick values) should be incorporated in lot size calculation.
I don't see this as a Disadvantage, as long as your Basket does make sense, and not just a mix of random instruments.
I don't think so, again , as long as your Basket does make sense, and not just a mix of random instruments.
This is normal conditions when trading multiple currencies and hence they apply to the basket. No harm in that.
I know. Simulation of Stop or Limit Orders can be applied to the Basket Chart as LITEchild suggested HERE, and when triggered (Using the EA) will open market orders on the Basket pairs.
Thank you felixis for raising such concerns, they've been helpful to me.
Regards,
Khalil
Dislikedas for basket trading several issues are to be considered
1) history made by the script generates high and lows that may not be the real ones. you base your computing on High and Low of each pair the high and low may not occur at the same time on each pair hence the high and low is virtual good luck for backtesting and drawing RS on thisIgnored
Disliked2) the position size of buy and sell order on each pair are the most important, you are limited to 0.01 lot increments
by consequence the weighting of the pairs cannot be arbitrary they must be computed such as when a basket order occur
the lot size are exactly a multiple of 0.01 lot and greater than or equal to 0.01 lotIgnored
Disliked3) if you trade the chart like a standard currency you expect when it goes up or down that your equity will follow the same
hence the case 2)
if not you are seeing an indicator that has nothing to do with the real trade such as the rsi, or the sma for exampleIgnored
Disliked4) by corrolary of case 2) trading a basket put you at a disadvantage
- the spread of the virtual basket is higher
- the execution on this prehistoric platform is a problem as MT4 cannot process more than one order at a time
- you cannot trade 1 microlot
-> if you have say 10 currencies in the basket the minimum size tradable is 0.1 lot = 10 * 0.01
-> if you use coefs differents from 1 the minimum size will be higher
- the leverage used will be reduced
- the margin required to trade will be higher
- you are exposed to spread swipe in any currency that could endanger the all tradeIgnored
Dislikedtaking the inverse of the pair is dangerous
you are trading in lot and if you invert the pair the variation for one pip is not the same
EDIT: the variation of money for the pair is linear 1 pip = x amount of $ for a fixed amount of lot
if you take the inverse of it
the variation is not anymore linear in terms of moneyIgnored
Dislikedthe advantage to trade something virtual is dubious as nobody else than you see the instrument
the validity of SR are compromisedIgnored
Dislikedbe aware that SR and all other patterns appear in a random walk tooIgnored
Dislikeddemo platform is always fast in the execution but on real condition the chaining of the orders and the non transactionnality of it can make your order takes 20 second to complete with the slippage damage you can imagineIgnored
Dislikedand the final 5) if you think you can mitigate the chaining by putting limit/stop order you cannot put limit stop order on the chart as one value in the chart can equate to an arbitrary combination of values in the pairs hence the impossibility to put on each pair a stop limit order you can only trade with market ordersIgnored
Thank you felixis for raising such concerns, they've been helpful to me.
Regards,
Khalil
No guts, no glory