Glossary
What Are MAE and MFE in Trading
How far price moved against you inside the trade, in R. It shows where a sufficient stop would really have been. How far price moved in your favour inside the trade, in R. Computed from minute candles strictly between entry and exit.
How it works
MAE (Maximum Adverse Excursion) is the largest distance price moved against an open trade between entry and close, regardless of how the trade ended. MFE (Maximum Favorable Excursion) is the largest distance price moved in the trade's favor over that same period. Both metrics measure intra-trade price movement, not just the final result.
Together, MAE and MFE reveal what happened inside a trade that only shows up as a single R in the final tally. A large MAE before a profitable close means the trade came close to its stop and easily could have ended negative. A large MFE before a close at a small profit or breakeven means part of the potential gain was handed back to the market.
Reviewing MAE and MFE across a series of trades helps spot systemic entry and exit problems: a consistently large MAE before profitable trades can mean entries happen too early relative to setup confirmation, while a consistently large MFE before weak results can mean the target or trailing stop is set too conservatively.
Example
Entry at 100, stop at 96. During the trade, price dipped to 97 (MAE = 3 points from entry) and rallied to 112 (MFE = 12 points) before closing at 106. The final result is +6 points, but the trade came closer to its stop than it seemed and gave back part of the move up to 112.
Common mistake
A common mistake is only looking at the final R of closed trades and never analyzing MAE/MFE at all. A systemic issue — say, targets set too conservatively — then stays hidden as long as trades keep closing in the green.
Related terms
Frequently asked questions
- How do you use MAE in practice?
- A consistently high MAE before winning trades is a reason to check whether entries happen before the setup's conditions are fully confirmed.
- What does a high MFE show?
- It shows how much potential profit was given back to the market before close — a signal to revisit exit logic or trailing stop placement.
Plan versus outcome — for every trade
The Trading OS journal keeps the planned RR and the actual R of each trade side by side and computes expectancy from real results.
No sign-up — the journal runs in your browser; an account is only needed for sync.