Maximum Adverse Excursion

Maximum adverse excursion (MAE) is the furthest a trade moved against the position before it was closed, measured from the entry price. Its counterpart, maximum favourable excursion, records the furthest it moved in favour. Both are recorded per trade in a journal and are only meaningful in aggregate. The usual reason to track MAE is to see whether stop placement matches how trades actually behave: if winning trades routinely show a large adverse excursion before turning, a tight stop is converting winners into losers, and if they almost never do, the stop is further away than the risk requires. MAE describes the past behaviour of a recorded sample and does not predict how far a future trade will run against you.