Lesson 3. Robot Types and Where They Work
Classify common EA styles, see their strengths and weaknesses, match them to timeframes and markets, and learn what's "toxic" or against broker rules.
You saw why MT5 is our toolbox. Now choose the right type of robot for your goals and infrastructure.
3.1. Taxonomy Overview: Robot Types
Most robots fall into a few families. Each has trade-offs. Pick what fits your time and risk profile.
Trades in the direction of higher highs/lows (uptrend) or lower highs/lows (downtrend), often using MAs/pullbacks.
Strengths
- Rides bigger moves
- Fewer trades on higher TF
Weaknesses
- Whipsaws in ranges
- Late entries
Compliance: Generally fine on MT5 brokers.
Fades short-term extremes back toward the "middle" in ranges.
Strengths
- Frequent opportunities in ranges
Weaknesses
- Dangerous in strong trends
- Needs clear range filters
Compliance: Generally fine.
Enters when price breaks above/below a consolidation box.
Strengths
- Can catch fast moves
- Simple triggers
Weaknesses
- False breaks
- Sensitive to spread/slippage
Compliance: Generally fine.
Trades around economic releases.
Strengths
- Large moves possible
Weaknesses
- Extreme spreads/slippage
- Broker restrictions possible
- Unpredictable
Compliance: Check broker terms; many disallow certain tactics.
Adds positions against adverse moves and/or multiplies size after losses.
Strengths
- Looks smooth… until it doesn't
Weaknesses
- Tail risk of large blow-ups
Compliance: Often violates risk policies; avoid.
Exploits price delays between feeds/venues.
Strengths
- Can work briefly
Weaknesses
- Typically against broker ToS
- Accounts can be closed
- Requires ultra-low latency/hardware
Compliance: Frequently not allowed on retail MT5 brokers.
Targets small, fast moves; holds seconds/minutes.
Strengths
- Many small opportunities
Weaknesses
- Very sensitive to spread/latency/slippage
- Higher cost impact
Compliance: Generally fine, but infra matters.
3.2. Time Horizons: M1–M5 vs M15–H1 — What Changes
Timeframes affect noise, costs, and infrastructure
- •M1–M5 (scalping): more signals, more noise; spread/slippage are a large part of each trade; requires tight spreads and low latency (VPS near broker).
- •M15–H1 (intraday/swing): fewer signals; smoother moves; costs are a smaller fraction; more forgiving for beginners.
- •Cost sensitivity increases as timeframe decreases (small TP vs fixed costs).
- •VPS helps with stability for any EA; critical for scalpers.
| Factor | M1–M5 | M15–H1 |
|---|---|---|
| Signals | High | Low |
| Noise | High | Low |
| Cost Impact | High | Low |
| Infra Need | High (VPS) | Low |
| Beginner-Friendly | No | Yes |
3.3. Where They Work: Markets Applicability Matrix
Match types to markets and access paths
| Type | Forex (MT5) | Crypto via CFD | Crypto Exchange/API | Indices/Metals CFD |
|---|---|---|---|---|
| Trend | ✔Many brokers, testable | ✔Via MT5 CFD | ~24/7 ops, more dev | ✔Testable in MT5 |
| Mean Reversion | ✔Range detection needed | ✔Higher volatility | ~More complexity | ✔Indices can trend |
| Breakout | ✔Session opens work | ✔High volatility | ~API latency varies | ✔News-driven breaks |
| News | ~Spreads spike | ~Unpredictable | ~Exchange delays | ~Gap risk |
| Scalpers | ✔Low spread brokers | ~Spread matters | ~Latency critical | ~Spread varies |
| Grids/Martingale | ✖Toxic tail risk | ✖Toxic | ✖Toxic | ✖Toxic |
| Arbitrage | ✖Against ToS | ✖Against ToS | ~Grey area | ✖Against ToS |
* Crypto exchange/API automation requires external stack (servers/bots); MT5 tester fits Forex/CFD better.
* Arbitrage is typically non-compliant with retail broker ToS.
3.4. Execution Realities: Can It Work With Your Latency/Spread?
Scalper or swing — does your setup make sense?
OK: Trend (M15–H1) with 60 ms and 1.4 pips: OK for demo and learning; costs are a smaller fraction.
M15–H1 strategies are more forgiving for beginners.
Sandbox is educational; always validate with backtests and demo.
3.5. Practice: Pick Your Candidate Type and Fill a Robot Fit Sheet
Practice — 10–15 min
Fill in your "fit" and guardrails
Forbidden Practices (pre-checked):
This is a draft. You will learn MT5 building blocks in Lesson 4.
Lesson 3 Quiz
Test your understanding with 3 questions. Pass with 2/3 correct.
What's Next?
You've mapped robot types to markets and timeframes. Next, we'll explore the building blocks of MT5 that let you install, configure, and test any EA.
Next: MT5 Architecture for EAs