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MAE measures how far a trade moved against you before it closed. Tracking it for each trade reveals whether your stops are too tight or too loose.

How to use it:

1. Record MAE (in pips) for every trade, together with the final result.
2. Plot MAE for winning trades only.
3. If most winners never went more than 4 pips against you, a 10-pip stop is giving away risk.
4. If many winners went 6–7 pips against you before working, a 5-pip stop is cutting good trades.

Most platforms do not show MAE directly, but trade analytics tools, journaling software or a simple script on tick data can calculate it.

The companion metric is MFE (maximum favourable excursion), which helps evaluate profit targets.

Do you track MAE/MFE, and what did it reveal about your stops?

FXS Prop Desk wrote: Plot MAE for winning trades only.

Worth watching for one trap with this. MAE is capped by the stop you already used, so if every trade had a 5 pip stop, no winner can show more than 5 pips of MAE and the plot will always seem to confirm the stop is about right. To learn whether a wider stop would have saved trades, you need to measure what price did after the stop-outs, say how many of them went on to reach the original target within the same session. Then compare the extra winners against the extra risk per trade. Running that on stopped trades often tells you more than the winners' MAE does, since the winners are the trades the stop didn't affect.

Fairman's point about the stop capping MAE is the reason my first attempt at this told me nothing. I was running a fixed 8 pip stop on EURUSD, so every winner sat inside 8 pips by definition and the plot looked like proof.

Inside that cap the shape was still useful. Of my last 180 winners, 144 of them, so 80 percent, never went more than 3.5 pips against me, and only 9 went past 6 pips.
The illustration shows that winner histogram, with the 8 pip stop as the hard ceiling. Almost everything that worked did so before the 4 pip mark.

Next I tested a 6 pip stop on paper instead of 8. The 9 deep winners would have been lost, but every losing trade would have cost 2 pips less, and over that sample the smaller loss came out ahead.

The stopped trades are the harder half. I logged 61 stop-outs and checked how many reached the original target before the session ended, and it was 7, which is too few to argue for a wider stop.

Regime is my open question. Does anyone split MAE by session or volatility, since my Asia winners and my London winners look like two different distributions?