Every trade has a path between entry and exit. MAE and MFE record the two extremes of that path. MAE (maximum adverse excursion) is the worst price the market reached against your position while it was open. MFE (maximum favorable excursion) is the best price it reached in your favour. Together they say whether your stop was too tight and whether your exit left money behind.

Example

You buy at 100 with a stop at 98, so 1R is 2 points. While the trade is open the price dips to 99, rallies to 104, and you sell at 102.

Measure Price Distance In R
MAE 99 1 point against 0.5R
MFE 104 4 points in favour 2.0R
Exit 102 2 points kept 1.0R

The trade won 1R but was worth 2R at its best. Half of the available move was left behind.

What they reveal

  • Stops. If many winners had an MAE close to the full stop, your stop is about right. If most losers hit the stop after an MAE that barely moved, entries may be early.
  • Exits. A large gap between MFE and the exit on winners means exits are early or targets are too close. See exit efficiency.
  • Gave back. A loser that was up 1R or more at its MFE is a trade that could have been managed to breakeven or a partial profit.

How to record them

After the trade, look at the chart for the time the position was open and note the lowest and the highest price. For a short, MAE is the highest price and MFE the lowest. Precision to the tick is not needed; consistency is.

In SetupBook

MAE and MFE are price fields in step 2 of the trade form. Analytics turns them into the "Exit analysis" card: average exit efficiency, money left on the table, average MFE in R against the R you kept, and the number of losers that were up at least 1R.