Maximum Favorable Excursion (MFE)
The furthest a trade moves in your favour before it either closes at the target or reverses into a loss.
Maximum Favorable Excursion (MFE) is the maximum unrealised profit a trade reaches during its lifetime. Paired with final outcome, it reveals how much of the available move traders actually capture.
If most trades reach 3R MFE but average exit is 1.2R, exits are being triggered too early (or stops are being moved too aggressively). If exits are near MFE, the system captures most of available moves — a sign of well-calibrated targets and trailing stops.
Related Terms
Maximum Adverse Excursion (MAE)
The furthest a trade moves against you before it either recovers and wins or hits the stop-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.
IntermediateScaling Out
Exiting a position in pieces as price advances, locking in partial profits while letting the remainder run toward a larger target.
IntermediateTake-Profit
A target price at which a winning trade is automatically closed to lock in gains before a reversal can erode them.
BeginnerTrade Journal
A systematic record of every trade including entry, exit, size, reasoning, and outcome — the primary tool for improving a trading edge.
Beginner