Maximum favourable excursion (MFE)

Maximum favourable excursion (MFE) is the largest open profit a trade reached between entry and exit, measured from the entry price. Comparing MFE with the realised result shows how much of the available move each trade gave back before closing.

Senzoukria · Glossary · Updated September 2026

Definition and units

For a long position, MFE is the highest price traded while the trade was open minus the entry price; for a short, the entry minus the lowest price. It is non-negative and is zero when price never moved in the trade's favour. Like its adverse counterpart it needs the price path inside each trade, so it is available from a tick or bar replay but not from a plain trade list.

  • MFE ≥ realised result for every trade, since the exit cannot exceed the best price seen.
  • MFE − result is the amount given back; a trade closed at its best price gives back nothing.
  • Ticks are the natural unit for target placement; currency for account comparison.

Reading the MFE chart

Plot each trade's MFE on one axis and its final result on the other. Points on the diagonal banked their whole excursion. Points far below the diagonal reached a large open profit and returned most of it, which suggests the target was too far or the exit rule too slow. Losing trades with a substantial MFE are a specific pattern: they were winners at some point and became losers, and a break-even or trailing rule would have changed them.

  • Diagonal: exits captured the move.
  • Below the diagonal: profit given back; examine target and time-based exits.
  • Losers with high MFE: candidates for a protective rule, to be re-tested rather than assumed.

In Senzoukria

The backtest results panel draws "Favourable excursion vs result" next to the adverse excursion chart. Its hint states that on the diagonal everything was banked and that a point far below it gave most of its move back, the target being too far or the exit too late. Both excursion charts depend on the run having a price path per trade; otherwise the panel reports "No excursion measured on these trades".

The journal's prop firm simulation uses the same MAE/MFE data to decide whether a drawdown rule that tracks open profit was breached; when trades carry no excursion, it says the price path inside each trade is unknown and declines to conclude.

Common mistakes

  • Setting targets at the median MFE without re-running the test: the new exit changes every later trade.
  • Comparing MFE across instruments in points; use ticks or currency through the point value.
  • Assuming a large MFE was capturable; the best tick may have traded once, with no size behind it.
  • Reading MFE from bar closes rather than highs and lows, which understates it.

This page in other languages

Frequently asked questions

How do MAE and MFE work together?
MAE describes the worst point of the trade and MFE the best. Together they bracket the path: a trade with a small MAE and a large MFE was comfortable from the start; one with a large MAE and a small MFE was under pressure throughout. Stops are studied on the first chart, targets and exits on the second.
Can MFE be measured on manual trades in the journal?
Only if the trade record includes the price path or the excursions themselves. A journal built from entry and exit prices cannot recover the best or worst point, and Senzoukria's simulation reports that limitation instead of estimating it.

Keep reading

Strategy researchTest a trading strategy, from observation to challenge rulesDefine an observation, question it with the copilot, write a rule and explore costs, drawdown and fictional challenge limits in an interactive example.Quant · Start hereQuant trading for beginners: from idea to backtestDefine a testable rule, choose suitable data and evaluate later periods after costs.Order flow · HubOrder flow trading: the complete guideThe hub. What order flow is, what it shows — aggression, delta, imbalance, absorption, liquidity — and the tools that read it, each linked to a full guide.