The basis of this trading is that there are trade-able correlations between currency pairs. These correlations are not 100% consistent but when certain pairs move in one direction, associated pairs often generally follow. They are applying trend trading to multiple currencies. So basket traders are jugglers. They see multiple charts at one time and make decisions based on multiple inputs. They can trade a single currency or multiple currencies simultaneously. Their biggest challenge is understanding when the traditionally related pairs are most likely to move in unison. Just like trend traders, they often use lagging indicators to determine the trend of multiple currency pairs. And sometimes when they realize that all associated pairs are moving in one direction it is to late to get it as the pairs have moved their own ways again.
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