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When you buy into a basket, each asset in it is sized to a target weight, say, 30% into one asset and 20% into another. Prices don’t move together, though. If one asset in the basket rallies while another lags, your actual weights drift away from the targets over time. Rebalancing is how MirrorTrade corrects that drift automatically, without you having to watch the basket or trade it yourself.

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How it works

MirrorTrade periodically checks how far each asset in your basket has drifted from its target weight. If any asset has drifted past a threshold, by default around 7.5%, the basket is flagged as needing a tune-up. When that happens, MirrorTrade trims the positions that have grown too large and adds to the ones that have shrunk, bringing the basket back toward its original target weights.

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Why it doesn’t happen every second

Rebalancing runs on a cooldown, by default about once an hour, so the basket doesn’t over-trade on every small price wiggle. Small, temporary drift is normal and expected between checks. That interval is one of the settings a basket can be configured with, so it isn’t fixed at exactly one hour in every case.

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What this means for you

You don’t need to manually rebalance a basket, or even watch it closely. The point of a basket is that it maintains its own intended shape over time, the same way it would if you were rebalancing it by hand, just without the effort.