Why I Track Maximum Adverse Excursion

Maximum adverse excursion, or MAE, measures how far a trade moves against the entry while the trade is open.

Tracking MAE across historical trades can help answer useful questions.

Are my stops consistently placed too close? Do some setups experience large temporary drawdowns before working? Am I holding losing trades longer than my rules allow?

MAE doesn't provide a perfect stop-loss formula, but it gives me evidence to study.

I would rather refine risk rules using trade data than change them based on one frustrating loss.