The Different Types Of Expert Advisors
There are many different types of Expert Advisors available for the MT4 platform. In this section we discuss most of the well known types. This is not a final list – every year dozens of new Expert Advisors and strategies are released to the market. Not only that but there are companies that will create an Expert Advisor based on a traders request\idea.
An expert advisor can be programmed to use many different strategies or mathematical algorithms. They can include grid strategies, hedging strategies, martingale and reverse martingale strategies, trend following strategies, correlation strategies. They can be news based, breakout based, hedge based, and scalper based or adaptive. Sometimes an Expert Advisor will be a combination of these strategies.
After researching the many Expert Advisors out there and their strategies we have found two different classifications. One of the classifications is Classic EAs vs More advanced EAs. Another classification is division into news, breakout, hedge, scalper and adaptive.
News EAs | Scalper EAs | Breakout EAs | Hedge EAs | Adaptive EAs
News Based Expert Advisor – These Expert Advisors are a type of hedging Expert Advisor. The News Expert Advisor will attempt to take advantage of breaking news events and the enormous shifts in the different pairs that will occur throughout financial news releases.
Scalper Based Expert Advisor – In many scenarios these types of Expert Advisors are restricted by a Forex broker – if used with a broker that doesn’t allow this type of trading it may get your account cancelled. On the other hand these are usually the more profitable Expert Advisors. They aim to secure small profits as soon as they are available based on recurring trends.
Breakout Based Expert Advisor – These types of Expert Advisors open a trade when the price of a certain pair breaks through specific support and resistance levels.
Hedge Based Expert Advisor – This category includes any Expert Advisor that will open two separate and opposing positions while attempting to minimize the loss on one while maximizing the profit on the good position.
Adaptive Expert Advisor – This category represents a new breed of Expert Advisors. These second generation Expert Advisors are much more adaptive to their environment and can react to many different situations and trends. Many of them are based on neural networks making them think almost like humans.
Classic EAs | Advanced EAs
Classic Expert Advisors - These Expert Advisors attempt to trade bounces off of support and resistance and reversals. They will open a position when a high probability setup seems likely to occur. Many of these expert advisors will come with trailing stop losses - a feature which helps you guarantee your profits. They can also be predefined to monitor the various market conditions for reversals and then close your position immediately if necessary.
Advanced Expert Advisors - These Expert Advisors can trade multiple pairs at the same time while monitoring many timeframes simultaneously. This unique capability supplies you with a wide range of options when choosing a trend – this would have taken you hours if you needed to do it manually.
You should choose to trade with an Expert Advisor that sits well with your trading style. Try playing around with the different parameters involved in the configuration of the Expert Advisor to get to know it better and find the combination that suits you the most. All this can be done on a demo account with your broker so that you don’t have to risk a single dime.
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