Maximum Favorable Excursion (MFE)

What is Maximum Favorable Excursion (MFE)?

MFE stands for Maximum Favorable Excursion and it tells you what is the max amount of price movement in your favor during the duration of your trade. By comparing MFE to your actual exit, you can evaluate whether you're capturing enough of the profitable move.

Learn more: MFE/MAE Charts Guide | Advanced Stats Reference

Two Calculation Methods on TradesViz

1. Theoretical Trade MFE (Price-Based)

First, calculate Price MFE as the difference between the highest price during the trade and your entry price:

Price MFE = Highest Price - Open Price (for longs)
Price MFE = Open Price - Lowest Price (for shorts)

Then multiply by your total position size:

Trade MFE = Price MFE × Total Quantity

Example: Open price $5,478.25, highest price $5,482.00, 20 contracts
- Price MFE = 5482 - 5478.25 = 3.75 points
- Trade MFE = 3.75 × 20 = 75 points = $3,750

This is the theoretical maximum profit you could have made if you exited at the absolute peak with your ENTIRE position. Very stringent way to evaluate your exits.

2. Running PnL MFE (Equity-Based)

Instead of using price × position, this method uses the peak (highest point) of your actual running PnL curve during the trade.

How it's calculated:
1. TradesViz takes PnL snapshots every 5 seconds to 1 minute
2. The maximum value of this curve = Running PnL MFE

Example (same trade as above):
- Running PnL peaked at $6,000 during the trade
- Running PnL MFE = $6,000

Why the difference? Running PnL accounts for scaling in/out. If you added contracts at different prices, the running PnL reflects your actual equity at each moment.

This is what prop firms use - they evaluate trailing drawdown from high-water marks, which is exactly what Running PnL MFE/MAE measures.

Account Setting: "Use running PnL for Trade MFE/MAE calculation" controls which method is used. This is enabled by default for all new accounts.

Alternative MFE/MAE Calculation

By default, TradesViz uses the maximum of running PnL as MFE. For example, in a long trade where prices went up from entry, MFE would show the peak profit even if prices never went significantly in your favor.

Some traders prefer to zero out MFE if prices never moved favorably. For this, enable "Use alt. calculation for MFE/MAE values in cases where prices never go against entry direction" in Account Settings.

Important: In our opinion, zeroing out throws away valuable data. Trades that came very close to entry before recovering could have easily been losses this insight is lost in zero-MFE mode.

MFE Analysis Charts

TradesViz provides these MFE charts under Performance Metrics:

• MFE vs PnL
• MFE vs Volume
• MFE vs Open Time
• MFE vs Close Time

Tip: Zoom into your trends by clicking on the zoom select button at the top right corner of each chart and drag into an area of interest.

What Large MFE-Exit Gap Means

If the distance between your MFE and actual exit price is too high, you're not capturing the full profitable move. This may indicate:

• Exiting too early (leaving money on the table)
• Need to adjust profit targets
• Consider trailing stops instead of fixed targets

Combine with Risk/Reward and R-value charts for optimal profit placement.

Recalculating MFE

If your MFE shows N/A:
1. Stats are calculated late EOD or early morning automatically
2. You can manually recalculate via Trade Explore > Recalculate button
3. Use Group Apply for bulk recalculation of multiple trades