Maximum Adverse Excursion

Maximum Adverse Excursion
Developed by John Sweeney, Maximum Adverse Excursion (MAE) is designed to calculate the worst possible loss that might occur during a trade.

Maximum Adverse Excursion
A historical measurement of the closed losing trades versus the closed profitable trades of a trading system.

Maximum Adverse Excursion
Developed by John Sweeney. Measuring negative price performance of a series of trades. This information is used to determine a reasonable stop-loss level based on the historical analysis.
Maximum Entropy Method ...

Maximum Adverse Excursion. The dollar amount of all trades against us, in the indicated time period, until we were stopped out at either a loss or gain. Expressed as dollars for three contracts.

For example, let's look at the idea of Maximum Adverse Excursion (i.e., the idea that losing trades don't go too far against us). This gives you an idea for limiting your stops, but when you try to apply it to your trading you may find some problems.

See also: Profit, Trading, Market, Loss, Adverse Excursion