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New MAE / MFE feature

kslay
Mar 19 2013 at 16:10
13 posts
Hey guys,

i'm puzzled how to read the new feature.

Can someone shed some light on this?
What exactly is the X and Y Axis....
I'm a bit confused....

regards

kslay

matzeldelaflor (matzeldelaflor)
Jan 06 2016 at 08:32
1 posts
I had some questions about myself when I first noticed this tool. Now that I understand, I might as well try to help explain it.

MAE stands for Maximum Adverse Excursion. It shows the max draw down of a trade compared to the profit or loss realized when the trade was closed.

For example: You enter a trade, and at it's WORST point (draw down and potential loss) it equals negative 5% of your account equity at that time, and you close the trade at 1% profit. So, this information shows potential risk versus realized reward per trade.

The above is the case when measuring MAE vs Trade Outcome (one of the settings you can choose). When this setting is chosen, the:

X-AXIS shows the profit or loss that was actually realized on each trade, while the
Y-AXIS shows the potential loss that could have occurred.

///////////////////////// MFE ////////////////////////////

MFE stands for Maximum Favorable Excursion. It shows the maximum profit potential that the trade had experienced compared to the profit or loss when the trade was closed. It's basically the opposite of MAE

For example: You enter a trade, and at it's BEST (potential profit that could have been extracted from the market during the trade) point in time it equals a 5% gain of your account equity at that time, and you close the trade at 2% profit. So, this information shows how much profit you may be leaving on the table.

The previous example is true when measuring MFE vs Trade Outcome (the 2nd of three settings you can choose for this tool). When this setting is chosen, the:
 
X-AXIS again shows the profit or loss that was actually realized on each trade, but this time the
Y-AXIS shows the max potential profit that could have been taken during the trade.

///////////////////////// MAE vs MFE ////////////////////////////

The third setting is MAE vs MFE which shows the variance between the maximum positive and negative potentials of each trade on the chart.

Hope this helped.

Make sure you fully understand every decision you make in the markets, why you made it and why the outcome occurred.
Arcforex
Mar 22 2018 at 08:29
38 posts
matzeldelaflor posted:
I had some questions about myself when I first noticed this tool. Now that I understand, I might as well try to help explain it.

MAE stands for Maximum Adverse Excursion. It shows the max draw down of a trade compared to the profit or loss realized when the trade was closed.

For example: You enter a trade, and at it's WORST point (draw down and potential loss) it equals negative 5% of your account equity at that time, and you close the trade at 1% profit. So, this information shows potential risk versus realized reward per trade.

The above is the case when measuring MAE vs Trade Outcome (one of the settings you can choose). When this setting is chosen, the:

X-AXIS shows the profit or loss that was actually realized on each trade, while the
Y-AXIS shows the potential loss that could have occurred.

///////////////////////// MFE ////////////////////////////

MFE stands for Maximum Favorable Excursion. It shows the maximum profit potential that the trade had experienced compared to the profit or loss when the trade was closed. It's basically the opposite of MAE

For example: You enter a trade, and at it's BEST (potential profit that could have been extracted from the market during the trade) point in time it equals a 5% gain of your account equity at that time, and you close the trade at 2% profit. So, this information shows how much profit you may be leaving on the table.

The previous example is true when measuring MFE vs Trade Outcome (the 2nd of three settings you can choose for this tool). When this setting is chosen, the:
 
X-AXIS again shows the profit or loss that was actually realized on each trade, but this time the
Y-AXIS shows the max potential profit that could have been taken during the trade.

///////////////////////// MAE vs MFE ////////////////////////////

The third setting is MAE vs MFE which shows the variance between the maximum positive and negative potentials of each trade on the chart.

Hope this helped.


I want to understand more on this topic.
can you please provide example with picture?

AniLorak
Mar 22 2018 at 13:18
920 posts
Arcforex posted:
matzeldelaflor posted:
I had some questions about myself when I first noticed this tool. Now that I understand, I might as well try to help explain it.

MAE stands for Maximum Adverse Excursion. It shows the max draw down of a trade compared to the profit or loss realized when the trade was closed.

For example: You enter a trade, and at it's WORST point (draw down and potential loss) it equals negative 5% of your account equity at that time, and you close the trade at 1% profit. So, this information shows potential risk versus realized reward per trade.

The above is the case when measuring MAE vs Trade Outcome (one of the settings you can choose). When this setting is chosen, the:

X-AXIS shows the profit or loss that was actually realized on each trade, while the
Y-AXIS shows the potential loss that could have occurred.

///////////////////////// MFE ////////////////////////////

MFE stands for Maximum Favorable Excursion. It shows the maximum profit potential that the trade had experienced compared to the profit or loss when the trade was closed. It's basically the opposite of MAE

For example: You enter a trade, and at it's BEST (potential profit that could have been extracted from the market during the trade) point in time it equals a 5% gain of your account equity at that time, and you close the trade at 2% profit. So, this information shows how much profit you may be leaving on the table.

The previous example is true when measuring MFE vs Trade Outcome (the 2nd of three settings you can choose for this tool). When this setting is chosen, the:
 
X-AXIS again shows the profit or loss that was actually realized on each trade, but this time the
Y-AXIS shows the max potential profit that could have been taken during the trade.

///////////////////////// MAE vs MFE ////////////////////////////

The third setting is MAE vs MFE which shows the variance between the maximum positive and negative potentials of each trade on the chart.

Hope this helped.


I want to understand more on this topic.
can you please provide example with picture?


Same here; I am also interested to know more about this topic; really relevant picture would be helpful.

Tiffany (TiffanyK)
Mar 22 2018 at 15:17
427 posts
Still a little confused. Why you will need this tool for? If someone can share their experience with it and what he/she use it for - it will be great?

Accept the loss as experience
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