MFE and MAE: how to review your trade exits and stop placement

By Overfit Labs · Updated 2026-10-24 · Educational only, not financial advice.

Your P&L shows where a trade ended. It doesn't show what happened in between: how far price went your way before you exited, or how much heat you sat through first. Two numbers cover that, MFE and MAE, and together they make an honest way to review exits and stops.

Definitions

• MFE (maximum favourable excursion): the best price reached in your direction between entry and exit.
• MAE (maximum adverse excursion): the worst price reached against you between entry and exit.

For a long, MFE uses the highest high and MAE the lowest low while the trade was open. For a short it's the other way round.

How to calculate them

• In %: long MFE = (highest − entry) ÷ entry; long MAE = (entry − lowest) ÷ entry.
• In R: divide the move by your entry-to-stop distance (see R-multiple). An MAE of 0.8R means price came 80% of the way to your stop.
• Exit efficiency: your actual move ÷ MFE. Kept 1.2% of a 3% MFE = 40% of the best move.

Example: long BTC at $60,000 with a stop at $59,000 (1R = $1,000). While open, the high was $62,400 and the low $59,400, and you exited at $61,200. MFE = 4.0% (2.4R), MAE = 1.0% (0.6R), result = +1.2R, and you kept 50% of the best move.

What patterns tell you

• Winners with low exit efficiency (you keep under ~30% of MFE): exits may be too early, or targets too far and you give it back. Compare a fixed target near your typical MFE with a trailing stop.
• Losers whose MFE was 1R or more: trades that worked first and then failed. Consider a rule for moving the stop or taking partial profit.
• Winners that rarely go past 0.5R MAE: your stop may be wider than the setup needs. Test a tighter stop on paper before changing anything real.
• Many losers stopped at about −1R with MAE far beyond the stop: the stop is doing its job. Check entries, not exits.

Review routine

1. Collect at least 20–30 closed trades of the same setup. Small samples mislead.
2. Record entry, exit, stop, and the high and low while open for each.
3. Look at the spread of MAE on winners and MFE on losers, not just the averages.
4. Change one rule at a time, and test it on paper trades before trading it live.
5. Add the result to your weekly journal review.

Limits

Candle highs and lows can include brief wicks, and bar data can't always tell you whether the high or the low came first inside one bar. Use MFE and MAE to find patterns across many trades, not to second-guess a single one.

Check it in Daily Edge

The free MFE / MAE trade excursion review takes a trade (or a closed Paper trade), pulls the high and low from public Coinbase candles and shows MFE, MAE, R and how much of the move you kept. Plan targets with the exit planner. Educational only, not financial advice.