Almost every Expert Advisor is built from one of a handful of basic mechanics. The name in the shop – "AI Gold Sniper", "Quantum Scalper Pro" – tells you little about it. The mechanics, on the other hand, decide how an EA makes money and above all how it loses money.
This guide shows the five most common types as animations: breakout, trend following, scalper, grid and martingale. You see when the EA enters, where the target and stop sit, how many positions are open at once – and why two strategies with the same profit curve can carry completely different risk.
How to read the animations
Every chart runs on a simulated EURUSD path with 0.10 lots and $10,000 starting capital. The path is deliberately favourable so the mechanics are visible: every basket closes, every trend carries. The figures are demonstration values – not a backtest and not a statement about any real EA.
- Candles are neutral: hollow = rising, filled = falling.
- Green and red appear only for money – realised profits and losses.
- Dashed lines are price levels: target, stop or pending stop orders.
- Triangles mark entries; the figures next to them are lot sizes.
The slider under the chart jumps to any point; pause stops the animation. If "reduce motion" is switched on in your system settings, you see the most telling moment as a still frame instead.
Strategy · simulation
Breakout
A quiet phase marks out a range. When price breaks out, the EA goes with it – anew in every session.
Demonstration values: a simulated EURUSD path with 0.10 lots and $10,000 starting capital, deliberately favourable – every basket and every trend works out here. Not a real trading strategy, not a backtest and not investment advice.
Breakout: leaving the quiet phase
A breakout EA waits for the market to settle into a range during a quiet phase, then places stop orders just above and below it. When price breaks out, one order fills and the other is cancelled. The stop sits on the far side of the range, the target at a multiple of that distance.
Strategy · simulation
Breakout
A quiet phase marks out a range. When price breaks out, the EA goes with it – anew in every session.
How it works
- In every session a quiet phase marks out a range: its high and its low.
- A buy stop sits above the high, a sell stop below the low. Whichever fills first counts; the other is cancelled.
- The stop sits on the far side of the range, the target at 1.5× that distance. Because every range has a different width, the levels move each time.
What we check
What we check on real breakout EAs: how often false breakouts hit the stop, and whether the reward-to-risk still holds after spread and slippage.
Demonstration values: a simulated EURUSD path with 0.10 lots and $10,000 starting capital, deliberately favourable – every basket and every trend works out here. Not a real trading strategy, not a backtest and not investment advice.
The strength: every position has a stop from the first moment. The maximum risk per trade is known before it opens.
The weakness: false breakouts. Many breakouts run a few pips and reverse – and the stop is hit. A breakout system lives on the few real breakouts earning more than the many false ones cost. It also trades exactly at the moment of the breakout, when spreads and slippage are at their worst.
Trend following: ride along instead of predicting
A trend-following EA does not try to guess turning points. It enters once a trend is visible – in the example, when the fast moving average (EMA 9) rises above the slow one (EMA 21) – and holds the position until the signal flips.
Strategy · simulation
Trend following
Trade with the trend: long while the fast average is above the slow one.
How it works
- Two moving averages show the direction: EMA 9 (fast) and EMA 21 (slow).
- While the fast one is above the slow one the EA is long; when it crosses below, it exits.
- Small false signals cost little – the one big trend brings the profit. If it never comes, the small losses pile up.
What we check
What we check on real trend EAs: how long sideways phases last, how deep the run of small losses in between gets – and whether the account can sit through it.
Demonstration values: a simulated EURUSD path with 0.10 lots and $10,000 starting capital, deliberately favourable – every basket and every trend works out here. Not a real trading strategy, not a backtest and not investment advice.
The strength: a few big winners carry the whole system. Losses stay small because the EA exits on every opposite signal.
The weakness: sideways markets. Without a trend, false signal follows false signal; a trend follower often loses more trades than it wins. That is not a bug but part of the method – yet it is hard to sit through, and trend EAs are often switched off too early in exactly those phases.
Scalper: many small steps
A scalper looks for small, fast moves: in, take a few pips, out. In the example it buys small pullbacks in an uptrend, with a 6-pip target and a 12-pip stop.
Strategy · simulation
Scalper
Many short trades with a small target – in, take a few pips, out.
How it works
- While price is above the EMA 20, the uptrend holds.
- After a small pullback the EA buys 0.10 lots with a tight target (+6 pips) and a stop twice as wide (−12 pips).
- Each trade earns little; the many small gains add up. Because the stop is larger than the target, the hit rate has to stay high – and spread and slippage take their biggest bite here.
What we check
What we check on real scalpers: whether live results hold up to the backtest once real spreads, commissions and slippage kick in – and with which broker.
Demonstration values: a simulated EURUSD path with 0.10 lots and $10,000 starting capital, deliberately favourable – every basket and every trend works out here. Not a real trading strategy, not a backtest and not investment advice.
The strength: short holding times, many trades, a smooth curve.
The weakness: costs. When the target is only a few pips, every tenth of a pip of spread, every commission and every bit of slippage takes a noticeable share of the profit. On top of that the stop here is twice the target: one loss wipes out two winners. That is why the choice of broker and the latency to the trade server (VPS) matter more for scalpers than for any other type – and why scalper backtests so often drift from live results. More in backtesting and forward testing.
Grid: equal steps, one shared target
A grid EA buys and lays a grid below: if price runs against it, another position of the same size is added at a fixed distance (20 pips here). All positions share one target just above the average price.
Strategy · simulation
Grid
Equal positions at fixed steps. Halfway back is already break-even – as long as price comes back.
How it works
- The EA buys and lays a grid below: one more position every 20 pips, always 0.10 lots.
- All positions share one target just above the average price.
- Because they are all the same size, the average sits exactly in the middle: halfway back is break-even, and 5 pips above that the whole basket closes in profit.
- What the animation does not show: if price keeps running against the basket, the floating loss grows with every level – without a stop there is no built-in exit.
What we check
What we check on real grid EAs: the maximum floating loss on the live account, not the closed drawdown – and whether there is a hard stop for the whole basket.
Demonstration values: a simulated EURUSD path with 0.10 lots and $10,000 starting capital, deliberately favourable – every basket and every trend works out here. Not a real trading strategy, not a backtest and not investment advice.
The strength: price does not have to return to the first entry. Because all positions are the same size, the average sits exactly in the middle – halfway back is break-even. In sideways markets a grid harvests small profits continuously.
The weakness: there is no natural exit from a loss. If the market keeps running one way, level after level is added and the floating loss grows without ever showing up in the statistics of closed trades. That is why a grid equity curve often shows barely any drawdown – until the day the basket does not come back.
Martingale: double the size, a shorter way back
Martingale works like a grid but doubles the lot size at every level: 0.10 → 0.20 → 0.40 lots. The big positions drag the average price close to the lowest entry.
Strategy · simulation
Martingale
Each new position twice the size. A small bounce closes the basket – paid for with volume that explodes at every level.
How it works
- As with the grid, a position is added every 20 pips – but with a ×2 multiplier: 0.10 → 0.20 → 0.40 → 0.80 lots.
- The big positions drag the average down, close to the lowest entry.
- That is why a small bounce is already enough to profit. The catch: volume doubles at every level and the floating loss grows even faster – one level too many, and a single basket wipes out the gains of many before it.
What we check
What we check on real martingale EAs: the multiplier, the maximum number of levels and the volume at the last level relative to the account. A smooth equity curve is not a quality signal here.
Demonstration values: a simulated EURUSD path with 0.10 lots and $10,000 starting capital, deliberately favourable – every basket and every trend works out here. Not a real trading strategy, not a backtest and not investment advice.
The strength: even a small bounce closes the whole basket in profit. In the animation, break-even after three levels is only 29% of the way back – with the equal-sized grid it is 50%. The hit rate is correspondingly high and the curve especially smooth.
The weakness: volume grows exponentially. After seven levels a single position is already 64 times the starting size, and the floating loss grows even faster than the volume. One basket that does not come back can wipe out many months of gains in one go – or the account. The full arithmetic, and what our live data shows about grid and martingale EAs, is in Grid and martingale EAs: understanding the risks.
The five types at a glance
| Type | Stop per position | Where the risk sits | What we check in a review |
|---|---|---|---|
| Breakout | Yes, far side of the range | False breakouts, slippage at the breakout | Hit rate × reward-to-risk after costs |
| Trend following | Yes, via opposite signal | Long sideways phases | Depth of the losing runs between trends |
| Scalper | Yes, tight | Spread, commission, latency | Live vs backtest, broker dependence |
| Grid | Usually not | Open basket in a trend | Max floating loss, basket stop |
| Martingale | Usually not | Exponential volume | Multiplier, number of levels, lot size at the last level |
Many commercial EAs combine several of these: a trend entry with grid top-ups, a "scalper" that recovers losses with rising lots. For the risk, the most dangerous component always counts.
What the animations do not show
The simulation shows mechanics, not quality. All five examples end in profit because the path is built for it. In the real market, things an animation cannot depict decide the outcome: how often the favourable scenario actually happens, how deep the worst moment gets and whether your account survives it.
That is exactly what we check in our EA reviews: on verified live accounts, using the maximum drawdown or floating loss rather than pretty monthly returns. How to read those figures yourself is explained in trading metrics: drawdown and profit factor.
Verdict
The strategy type is the first question to ask an EA – before the return. Breakout, trend and scalper strategies carry a risk per trade you know in advance; their weaknesses are costs, false signals and patience. Grid and martingale move the risk into the open basket, where it stays invisible in the statistics for a long time. With them, a smooth curve is no proof of quality – often it is the opposite.