Craig beat me into the smart ass answer, so I'll give you the actual answer.
A basket refers to trading numerous instruments. It could be a lot of currencies, stocks, bonds, etc.. The idea is to smooth out the volatility in equity swings. If you trade enough things, some are always winning, others are dropping, some are impartial. It'll give smaller yields over time, but a much smoother equity curve.
Craig beat me into the wise ass answer, so I will provide you the real answer. A basket describes trading multiple tools. It might be a bunch of currencies, stocks, bonds, etc.. The point is to smooth out the volatility in equity swings. If you trade enough things, some are constantly winning, others are losing, some are neutral. It will give smaller yields with time, but a much smoother equity curve.
I enjoy the definition, easy for me to comprehend.
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