Maximum Adverse Excursion (MAE)
The furthest a trade moves against you before it either recovers and wins or hits the stop-loss.
Maximum Adverse Excursion (MAE), developed by John Sweeney, measures the maximum intra-trade drawdown for each trade. Plotting MAE across all trades reveals how far winners typically move against you before they recover — crucial for optimal stop placement.
If 90% of your winning trades have MAE less than 1.5R, a stop at 1.5× your initial risk would not have cut winners short. If losing trades consistently have larger MAE than winners, stops are well-placed. MAE is one of the most actionable metrics from a trade journal.
Related Terms
Average True Range Stop
A stop-loss level set at a multiple of the Average True Range to account for normal market volatility and avoid premature stop-outs.
IntermediateMaximum Favorable Excursion (MFE)
The furthest a trade moves in your favour before it either closes at the target or reverses into a loss.
AdvancedR-Multiple
A trade's result expressed as a multiple of initial risk. A trade that earns 2× the amount risked is a +2R winner.
IntermediateStop-Loss
A pre-set price level at which a losing trade is closed to cap the damage before it grows larger.
BeginnerTrade Journal
A systematic record of every trade including entry, exit, size, reasoning, and outcome — the primary tool for improving a trading edge.
Beginner