Strategy Class

Strategy class is the most important EA classification because each class has different risk characteristics, performance distributions, and operational requirements. Understanding strategy class lets buyers anticipate behaviour patterns that aren't obvious from headline performance metrics.

Major strategy classes and their characteristics:

• **Trend-following**: rides directional momentum once identified. Typical pattern: low win-rate (30-50%), high R-multiple wins (2-5R), long position-holding (hours to weeks). Broker conditions: relatively swap-sensitive (positions held overnight accrue carry); spread-tolerant (positions held long enough that spread cost is small relative to typical move). Editorial fit: safety-tier and low-risk-tier suitable; underperforms in range-bound markets

• **Mean-reversion**: trades counter-direction to range extremes, expecting reversion to range mean. Typical pattern: high win-rate (60-75%), small R-multiple wins (0.5-1R), short position-holding (minutes to hours). Broker conditions: spread-sensitive (small wins easily eroded by spread costs); execution-quality-sensitive (slippage on entry near range extreme can flip edge). Editorial fit: safety-tier and most-profitable-tier suitable; vulnerable to trending markets where range fails

• **Breakout**: captures volatility expansion at session opens or consolidation breaks. Typical pattern: moderate win-rate (40-60%), good R-multiple wins (1.5-3R), variable position-holding. Broker conditions: execution-quality-sensitive (slippage on breakout entry materially affects edge); LD4 colocation essential for London-open breakouts. Editorial fit: most-profitable-tier suitable; struggles during low-volatility regimes

• **Scalping (M1-M5)**: high-frequency trading on shortest timeframes. Typical pattern: high win-rate (65-80%), small R-multiple wins (0.5-1R), very short position-holding (1-30 minutes). Broker conditions: extremely execution-sensitive (every pip of spread matters; sub-15ms latency required); requires Tier-1 ECN with LD4/NY4 colocation. Editorial fit: most-profitable-tier suitable; structurally unsuitable for Standard-account brokers

• **Grid**: places multiple staggered buy/sell orders at fixed intervals, expecting price to oscillate through the grid. Typical pattern: very high win-rate (85-95%), very small R-multiple wins, indefinite position-holding (positions accumulate). Broker conditions: requires hedging support and tolerance for many simultaneous positions. Editorial position: EXCLUDED from safety-tier and most-profitable-tier consideration because tail-risk is structurally unbounded — a single regime shift wipes out the accumulated wins

• **Martingale**: doubles position size after each loss to recover. Typical pattern: high apparent win-rate (positions are eventually closed at marginal profit after multiple losses), structurally inevitable blow-up. Editorial position: EXCLUDED from all serious editorial consideration because the inevitable failure mode is mathematically guaranteed; only the timing is uncertain

• **Arbitrage**: exploits price discrepancies between brokers or instruments. Typical pattern: structurally limited capacity; vanishing returns as more capital deploys. Editorial position: rare in retail forex; legitimate variants require institutional infrastructure not accessible to retail

• **News-based**: trades around scheduled macro releases (CPI, FOMC, etc.). Typical pattern: very high R-multiple per trade but very few opportunities, prop-firm-incompatible. Editorial position: niche product category; most retail EAs in this class don't survive 12-month track records

When evaluating an EA, the strategy class explains a large fraction of expected behaviour. An EA marketed with 90%+ win rate is structurally suspicious — only grid and martingale architectures produce that win rate, and both are excluded from serious editorial consideration. Conversely, a trend-following EA with 40% win rate is well-aligned with its strategy class; pushing for higher win rate would indicate either over-fitting or strategy-class confusion.