Morning y'all!
I'd like someone to kindly explain why the largest loss may exceed the maximum adverse excursion.
So when I pull up the analysis tab in Strategy Analyzer, I like to look at the Profit/Loss vs. MAE chart to see where it makes sense to set a stop-loss for the strategy But I often see that the reported largest loss often exceeds the MAE. Maybe there's something I don't understand about the MAE?
From the help guide, MAE (max. adverse excursion) is defined as worst price trade reached – entry price.
So why does the Largest Loss exceed the MAE? The Largest Loss should happen at the worst price reached , no?
Does the chart actually plot on the x-axis, the maximum adverse excursion or the AVERAGE Maximum Adverse Excursion? If the later is the case, the charts need to be updated to avoid this confusion. Otherwise, kindly explain this phenomenon, please.
Thank you!
I'd like someone to kindly explain why the largest loss may exceed the maximum adverse excursion.
So when I pull up the analysis tab in Strategy Analyzer, I like to look at the Profit/Loss vs. MAE chart to see where it makes sense to set a stop-loss for the strategy But I often see that the reported largest loss often exceeds the MAE. Maybe there's something I don't understand about the MAE?
From the help guide, MAE (max. adverse excursion) is defined as worst price trade reached – entry price.
So why does the Largest Loss exceed the MAE? The Largest Loss should happen at the worst price reached , no?
Does the chart actually plot on the x-axis, the maximum adverse excursion or the AVERAGE Maximum Adverse Excursion? If the later is the case, the charts need to be updated to avoid this confusion. Otherwise, kindly explain this phenomenon, please.
Thank you!
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