What are MFE and MAE? Trade excursion analysis explained
MFE and MAE explained: maximum favorable and adverse excursion, trade efficiency, clean winners and scratchable losers, and how to set stops from your data.
MFE (maximum favorable excursion) is the furthest price moved in your favor during a trade. MAE (maximum adverse excursion) is the furthest it moved against you. Together they show what happened inside a trade - not just where it ended - and reveal whether your entries, stops and exits are costing you money.
Your P&L tells you where a trade ended. It says nothing about the journey: how far price went in your favor before you got out, or how close it came to your stop before it worked. That journey is where most of the improvement in a trading plan is hiding.
This guide covers how MFE and MAE are measured, the metrics built on them - efficiency, clean winners and scratchable losers - and how to read them across all of your trades.
Key takeaways
- MFE is the best price your trade reached; MAE is the worst. Both are measured from your entry, between entry and exit.
- Efficiency = realized move ÷ MFE. It shows how much of the available move you kept.
- Clean winners never went far against you - a sign of well-timed entries.
- Scratchable losers went your way first - a sign of a trade-management problem, not an entry problem.
- Median MFE and MAE are a starting point for setting stops and targets from your own data.
What are MFE and MAE?
- MFE - maximum favorable excursion. The furthest price moved in your favor while you were in the trade.
- MAE - maximum adverse excursion. The furthest price moved against you while you were in the trade.
How MFE and MAE are measured: a worked example
Both are measured from your entry, between entry and exit. A long entered at 100 that dipped to 98, ran to 106 and was sold at 103 has an MAE of 2, an MFE of 6, and a realized move of 3.
| Measurement | Calculation | Result |
|---|---|---|
| MAE | 100 − 98 | 2 |
| MFE | 106 − 100 | 6 |
| Realized move | 103 − 100 | 3 |
| Efficiency | 3 ÷ 6 | 50% |
Efficiency: how much of the move did you keep?
The first question MFE answers is how much of the available move you captured:
Efficiency = realized move ÷ MFE
In the example above, efficiency is 3 ÷ 6 = 50%. You were offered six points and kept three. Low efficiency across many trades usually points to exits: taking profit too early, or letting good trades round-trip.
What is a clean winner?
A clean winner is a winning trade that never went far against you - for example, one where MAE was no more than a quarter of MFE. A high share of clean winners means your entries are well timed: price moves your way soon after you get in.
The example trade isn’t one: its MAE of 2 is a third of its MFE of 6, more than the quarter threshold.
If most of your winners first went deep against you, your entries are early, and your stop is probably wider than it needs to be.
What is a scratchable loser?
A scratchable loser is a losing trade that went your way first - say, by at least half as much as it eventually went against you. These are the most frustrating trades in any journal, and the most fixable. A break-even rule or a tighter trailing stop would have turned many of them into scratches.
Count them. If a large share of your losers were green at some point, you don’t have an entry problem - you have a trade-management problem.
MFE and MAE metrics at a glance
| Metric | What it measures | What to look for |
|---|---|---|
| Efficiency | Realized move as a share of MFE | Low efficiency points to exits that leave the move on the table |
| Clean winners | Winners whose MAE stayed small next to their MFE | A high share means well-timed entries |
| Scratchable losers | Losers that went your way first | A high share means trade management, not entries, needs work |
| Median MFE and MAE | How far trades typically run for and against you | A data-based starting point for stops and targets |
How to read an MFE vs. MAE scatter plot
Plot every trade with MAE on one axis and MFE on the other and the patterns jump out. Winners cluster where MFE is large and MAE is small. Losers sit where MAE dominates. Losers sitting close to the diagonal - where price went nearly as far for you as against you - are your scratchable trades.
Over time, the medians tell you something even more practical: how far your trades typically run for you and against you. That’s the starting point for setting stops and targets from your own data instead of round numbers.
Excursion stats explain why your results look the way they do; expectancy tells you whether those results add up to an edge. Change a stop or a target based on MFE and MAE, then check that expectancy improved.
How Premo helps
Premo Trading reads the price bars inside every closed trade and calculates MFE and MAE automatically, with median MFE, MAE, efficiency, symmetry, clean-winner and scratchable-loser rates, and the scatter plot - for any symbol and any period. See it in Performance Analytics.
This article is educational and is not investment advice. Trading involves substantial risk of loss.
Frequently asked questions
What do MFE and MAE stand for?
MFE stands for maximum favorable excursion: the furthest price moved in your favor while you were in a trade. MAE stands for maximum adverse excursion: the furthest price moved against you while you were in the trade. Both are measured from your entry price, between entry and exit.
How do you calculate MFE and MAE?
Measure from your entry to the best and worst prices reached before you exited. A long entered at 100 that dipped to 98, ran to 106 and was sold at 103 has an MAE of 2 (100 − 98), an MFE of 6 (106 − 100) and a realized move of 3 (103 − 100). For a short, the same measurements are taken in the opposite direction.
What is trade efficiency?
Efficiency is the share of the available move you kept: realized move ÷ MFE. A trade that was offered 6 points and closed with 3 has an efficiency of 50%. Low efficiency across many trades usually points to exits - taking profit too early, or letting good trades round-trip.
What is a clean winner?
A clean winner is a winning trade that never went far against you - for example, one where MAE was no more than a quarter of MFE. A high share of clean winners means your entries are well timed. If most winners first went deep against you, your entries are early and your stop is probably wider than it needs to be.
What is a scratchable loser?
A scratchable loser is a losing trade that went your way first - for example, by at least half as much as it eventually went against you. A break-even rule or a tighter trailing stop would have turned many of these into scratches. A high share of them points to a trade-management problem rather than an entry problem.
How do MFE and MAE help set stops and targets?
Over many trades, median MFE and median MAE show how far your trades typically run for you and against you. Those medians are a starting point for placing stops and targets based on your own data instead of round numbers.