Currency: Average MFE – Average Trade

Percent: Average MFE – Average Trade

Points: Average MFE – Average Trade

This statistic returns a value that is useful in giving you a measure of how effective your exit conditions capture the price movements after your strategy enters a position. It shows you how much you give back from the best price reached before you exit the trade. A small number here is generally desirable since it would imply highly optimized exit conditions that capture most of the price movement you were after.

Example:

Enter long at $100

Market price rises to $110 so your MFE is now $110 - $100 = $10 or 10%

Market price declines to $107 and you exit your trade. ETD is now $10 - $7 = $3 or 3%

We know from the ETD that we gave back $3 in potential profit in this particular trade.