Maximum Adverse Excursion (MAE) is the maximum number of pips price moved against an open position at any point during the trade’s lifetime — not the final loss, but the deepest intra-trade drawdown before the position was closed. Introduced by John Sweeney in his 1996 book Campaign Trading, MAE gives traders a factual record of how much heat each trade took, independent of whether it ended as a win or a loss.
Key Takeaways
- MAE reveals your natural stop threshold: aggregate analysis across 50+ trades shows the pip level beyond which winning trades almost never recover, giving you a data-driven basis for stop placement.
- Stops set at round numbers are typically 1.5x–3x wider than the actual MAE of losing trades, meaning traders absorb unnecessary loss before stops trigger.
- Paired with Maximum Favorable Excursion, MAE exposes the most common retail pattern — cutting winners short while letting losers run.
How to Calculate Maximum Adverse Excursion
For every trade, record the worst price reached against your position between entry and close:
Long trade: MAE (pips) = Entry Price − Lowest Price Reached
Short trade: MAE (pips) = Highest Price Reached − Entry Price
The result is always a positive number representing adverse movement in pips. A EUR/USD long entered at 1.08500 that dips to 1.08320 before recovering has an MAE of 18 pips — even if the trade closes at a profit of 30 pips.
Most brokers and trading platforms expose the intra-trade low/high in trade history exports. The key habit is logging this figure for every trade rather than only recording the final P&L.
Quick Reference
| Aspect | Detail |
|---|---|
| Formula | Entry − Worst Intra-Trade Price (long) / Worst Intra-Trade Price − Entry (short) |
| Unit | Pips or account currency |
| Good Range | MAE on winners consistently below your stop distance |
| Warning Signs | Winners with MAE near or exceeding stop level; MAE on losers far below stop level |
| Companion Metric | Maximum Favorable Excursion (MFE) |
Practical Example
A EUR/USD day trader reviews 60 trades from the past three months. She logs the worst pip level price reached against each position during the trade’s lifetime.
Her 38 winning trades had a median MAE of 7 pips. Crucially, 34 of those 38 winners never exceeded 12 pips of adverse excursion before turning profitable. Her 22 losing trades had a median MAE of 19 pips. She had been setting stops at 25 pips across the board — a round number chosen to “give trades room.”
The MAE data tells a different story. With 34 of 38 winners surviving under 12 pips of adverse move, the data-driven stop sits at approximately 14 pips — just beyond the 12-pip natural threshold with a small buffer. Moving from 25-pip to 14-pip stops cuts maximum risk per trade by 44%, while the historical data suggests only 4 of 38 prior winners (10.5%) would have been stopped out prematurely.
Trading 0.1 lot (mini lot) on EUR/USD at $1 per pip, that stop reduction cuts dollar risk per trade from $25 to $14 — a meaningful improvement in risk per trade without touching the strategy’s win rate.
Maximum Adverse Excursion, or MAE, measures how far a trade moved against you before you closed it. By tracking this across many trades, you can find the exact pip level where winners stop recovering — giving you a data-driven stop loss, not a guess.
Common Mistakes
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Confusing MAE with the stop loss distance. The stop is where you intended to exit; MAE is where price actually went. A 25-pip stop does not mean trades routinely travel 25 pips against you — MAE data typically shows average adverse movement is much smaller.
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Analyzing too few trades. A sample of fewer than 30 trades produces unreliable MAE distributions. Sweeney’s original research indicated that 80% or more of winning trades fall below a consistent MAE threshold for a given system — but this pattern only becomes statistically meaningful at scale.
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Using MAE in isolation. A low MAE on losing trades could mean you’re being stopped out too early. Always compare MAE against the ATR for the timeframe you trade. A 7-pip MAE on an H4 EUR/USD trade where ATR is 60 pips is perfectly normal; the same number on a daily chart trade is unusually tight.
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Not separating MAE by setup type. A London session breakout trade and a New York reversal trade will have different MAE profiles. Mixing them into a single distribution obscures the natural threshold for each setup.
How PipJournal Tracks Maximum Adverse Excursion
PipJournal logs intra-trade high and low for every position, automatically calculating MAE and MFE without manual spreadsheet work. The analytics dashboard plots MAE distributions across winners and losers, making the natural stop threshold immediately visible. For prop firm traders managing tight drawdown limits, this data helps calibrate stops that protect challenge rules without over-tightening entries.
