What is MFE and MAE in MT5 strategy tester?
In MT5 Strategy Tester, MFE and MAE are important metrics used to evaluate the quality and behavior of trades during backtesting or optimization. They are available under the “Trades” and “Graph” tabs when you analyze individual trades or strategies.
📊 MFE – Maximum Favorable Excursion
- Definition: MFE is the maximum profit (in pips, points, or money) a trade achieved while it was open.
- Purpose: It shows how far the trade went in your favor before closing.
-
Example:
- You opened a buy trade.
- At one point, the price went up +50 pips, then reversed and you closed it at +10 pips profit.
- The MFE is +50 pips, even though your final profit is only +10.
📉 MAE – Maximum Adverse Excursion
- Definition: MAE is the maximum loss (in pips, points, or money) a trade experienced while it was open.
- Purpose: It shows how far the trade went against you before closing.
-
Example:
- You opened a buy trade.
- Price went down -20 pips before going up and you closed at +10 pips profit.
- The MAE is -20 pips, even though the trade ended profitably.
🔍 Why MFE and MAE Matter:
These metrics help in analyzing risk and reward profiles of your trades.
| Use Case | MFE/MAE Insight |
|---|---|
| 🛑 Stop Loss Optimization | If MAE is constantly high, you might be setting stop losses too tight or too loose. |
| 🎯 Take Profit Adjustment | If MFE is much higher than your average profit, you may be closing trades too early. |
| 📈 Trade Quality Evaluation | A good trade has low MAE and high MFE. |
| 🔄 Trailing Stop Strategy | MFE analysis helps decide when and how to trail stops. |
How to interpret the correlation of the following in MT5 Strategy Tester Result?
1. Profit and MFE
2. Profit and MAE
3. MFE and MAE
In MT5 Strategy Tester, interpreting the correlation between Profit, MFE, and MAE gives deep insights into the quality and behavior of your trades. Here's how to interpret these relationships:
📈 1. Profit and MFE
What it shows: How much of the favorable movement (MFE) actually turned into profit.
| Correlation | Interpretation |
|---|---|
| 🔼 High positive correlation | You are capturing most of the favorable move. The higher the MFE, the higher the final profit. ✅ This is ideal. |
| ➖ Low or no correlation | Trades go into profit but you don’t always capitalize on it (e.g., early exits or poor trailing stop). |
| 🔽 Negative correlation | Rare, but means the higher the favorable move, the lower the actual profit—could indicate bad exits or reversals before closing. |
📌 Goal: You want a high positive correlation between Profit and MFE.
📉 2. Profit and MAE
What it shows: The relationship between drawdown (risk) and final result.
| Correlation | Interpretation |
|---|---|
| 🔽 High negative correlation | Higher MAE (deeper drawdowns) lead to lower profits or losses. ❗This is a risk warning. |
| ➖ Low or no correlation | Your profits/losses don’t depend much on drawdown—possibly okay if your stop loss strategy is effective. |
| 🔼 Positive correlation | Riskier trades (with larger drawdown) often turn out to be more profitable. ⚠️ Be cautious—may work in trends but risky in reversals. |
📌 Goal: Preferably low or negative correlation, but not too negative. High positive MAE with high profits may signal poor risk management.
🔄 3. MFE and MAE
What it shows: The balance between potential reward and risk within trades.
| Correlation | Interpretation |
|---|---|
| 🔼 High positive correlation | Trades that move a lot in your favor also have large adverse movements. ⚠️ Volatile trades—potentially profitable but risky. |
| ➖ Low or no correlation | Unpredictable trade behavior. Could indicate inconsistency. |
| 🔽 Negative correlation | Trades that have higher favorable moves tend to have lower drawdowns. ✅ This is ideal for high-reward, low-risk setups. |
📌 Goal: Prefer negative or low positive correlation. High MFE with low MAE is a sign of quality trades.
✅ Summary Table
| Metric Pair | Ideal Correlation | Why? |
|---|---|---|
| Profit–MFE | High Positive | Shows you're capturing favorable moves efficiently |
| Profit–MAE | Low or Negative | Indicates good risk control; high drawdowns shouldn't lead to profit |
| MFE–MAE | Low or Negative | Suggests good trades have high reward with low risk |
What is MFE and MAE in MT5 Strategy Tester Result?