Hedging vs Netting Accounts: The One Word That Decides Whether an EA Can Run at All

Every MT5 account is either hedging or netting. The broker fixes it when the account is created, and it decides what the terminal does when an EA sends a second order on a symbol it already holds. Most retail EAs, ours included, are written for hedging. Put one on a netting account and it will not crash or warn you; it will quietly trade something other than the strategy you paid for.

On a hedging account, every filled order is its own position. An EA can hold a buy and a sell on the same symbol, or three buys with three different stops, and close any one without touching the others. On a netting account the terminal keeps one position per symbol. A second buy is folded into the first at an averaged price. A sell against an open buy reduces it, closes it, or flips it short if the sell is larger. The stop and target of the first position are replaced by whatever the latest order carried. From the second order on, what the EA thinks it holds and what the terminal holds no longer match.

The strategy tester has the same switch, and almost every published backtest, ours included, was run in hedging mode because that is what the EA was built for. A hedging backtest is not evidence of anything about netting: it never exercised the path where an entry becomes a modification, or where one position's stop is overwritten by the next. The only honest way to know is to run the tester with netting selected, and for most EAs the result is a different strategy with a different equity curve, not a slightly worse version of the same one.

In the terminal, the account line in the Navigator and the Trade tab title show the mode next to the account number and leverage: it says Hedge or Netting. The tester's settings tab has the same choice. An existing account cannot be switched; you open a new one of the other type. Most brokers' standard MT5 accounts are hedging. Some exchange-traded products, some accounts built for regulated or institutional markets, and some brokers in particular jurisdictions are netting only, and the account description says so if you look for the word.

Fewer positions than the EA's logic should produce. Journal lines saying position modified where you expected position opened. A stop loss that is not the one the EA set. A grid or scaling EA that opens one trade and then does nothing. A hedge-style EA whose sell closed its buy instead of running beside it. None of these are bugs a developer can fix; the code did what it was told and the terminal did what a netting account does. Send a report describing any of them and the first question back will be which mode the account is in.

Buyers sometimes ask for netting settings. For an EA whose logic depends on separate positions there is no such thing. Lowering the lot or disabling a filter does not restore the ability to hold two positions on one symbol. Some EAs detect the mode and refuse to trade, which is the polite behaviour; most carry on. The fix is a hedging account, at the same broker or another. If your broker offers only netting, that is a real constraint and no purchase removes it.

Reading one word in the account line takes ten seconds and decides whether an EA can run as designed at all. Sellers rarely mention it because it is assumed, and the assumption is usually right, which is exactly why the exceptions are expensive: a week of odd trades, then a refund request that is declined because the product does what it says on a hedging account. Read the word first.

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