MFE (Maximum Favorable Excursion)
Volume Profile Analysis glossary · Volume Profile Technicals
Definition
The best unrealized profit experienced during a trade's lifetime; used for target optimization.
MFE (Maximum Favorable Excursion) in plain English
MFE is the mirror image of MAE: it's the best profit a trade ever showed you on-screen while you still held it — the peak you COULD have cashed out at. Why care? If your trades regularly run up 20 points but you keep grabbing 8, MFE proves you're leaving money on the table and your profit target is set too shy. It's like noticing you always leave a party right before the best song plays — track it enough times and you learn to stay longer. Traders use MFE to set targets that actually capture the move the market tends to offer.
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