MAE (Maximum Adverse Excursion)
Volume Profile Analysis glossary · Volume Profile Technicals
Definition
The worst unrealized loss experienced during a trade's lifetime; used for stop optimization.
MAE (Maximum Adverse Excursion) in plain English
MAE tells you how far a trade went AGAINST you before it (maybe) turned around — the deepest point you were "in the red" while still holding. Why care? Because if your winning trades routinely dip, say, 8 points before working out, a stop-loss set at 5 points would have kicked you out of good trades for no reason. It's like tracking how cold a bath gets before it warms back up, so you know how much chill you have to tolerate to get the reward. Traders study MAE across many trades to place stops that survive normal wobble but still cut real losers.
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