What Is Maximum Adverse Excursion (MAE)?
MAE is the furthest a trade moved against you before it closed. Studying it tells you whether your stop-losses are too tight, too wide, or about right.
Maximum Adverse Excursion (MAE) is the worst unrealised loss a trade reached while it was open — the deepest it went against you before you exited, win or lose. Traders also call it the "heat" a trade put you through. Tracktions measures it in R so trades of different sizes compare cleanly.
Why it matters
A trade can close at +1R yet have dipped to −0.8R along the way. The result looks calm; the journey was not. MAE captures that journey, and it is the best evidence for where your stop-loss truly belongs.
What the patterns tell you
- Winners with low MAE — your entries are clean; price rarely goes against you before working. Tight stops would cost little.
- Winners with high MAE — you are right eventually, but only after sitting through deep heat. Your stop may need room, or your timing needs work.
- Losers with MAE far beyond your stop — slippage or gaps are taking you out worse than planned.
A worked example
| Trade | Closed at | MAE (heat) |
|---|---|---|
| A | +2.0R | −0.3R |
| B | +1.5R | −0.9R |
| C | −1.0R | −1.0R |
Trade B won, but only after nearly a full R of heat — a sign your stop placement and entry timing deserve a second look.
How to use it
- Set stops on evidence — if your winners rarely exceed −0.5R of heat, a −1R stop is giving away room you do not need.
- Read it with MFE — adverse excursion shows the pain; favourable excursion shows the profit you left on the table.
Educational content only. Tracktions is a trade-journaling and analytics tool, not investment advice — we are not SEBI-registered advisers and do not provide trade recommendations, tips, or assurances of returns.