📉 Most Hostile Tour (MAE) — The Key to Higher Cease Placement
🎯 The Lesson
Most merchants don’t know the way far a commerce sometimes goes towards them earlier than turning worthwhile.
That distance is known as MAE — Most Hostile Tour.
In case your cease is inside your MAE zone, you’re going to get stopped out even when your thought is appropriate.
Understanding MAE turns stop-loss placement right into a science, not a guess.
⚙️ Step 1: What Is MAE?
MAE is the most drawdown a commerce experiences from entry earlier than shifting into revenue.
Instance:
You purchase EURUSD at 1.1000
Value drops to 1.0988 (–12 pips)
Then rises to 1.1030
MAE = 12 pips
In case your cease was 10 pips, you bought faraway from a successful commerce.
📊 Step 2: Calculate Your Common MAE per Setup
Undergo 20–30 previous trades of the identical technique.
Be aware the utmost drawdown every commerce skilled.
Instance MAEs for a breakout technique:
12, 15, 17, 14, 11, 18, 16, 20, 13, 15…
Common = 15–17 pips
This implies your cease ought to NEVER be smaller than 17–20 pips for this setup —
in any other case, you’re assured to be fallacious early.
🔢 Step 3: MAE + ATR = The Excellent Cease Components
Mix MAE with ATR for higher accuracy:
Cease Loss = MAE + (ATR × 0.5)
Instance:
This creates a cease loss that respects each your technique’s conduct and market volatility.
📉 Step 4: How MAE Protects You From “Fakeouts”
Most losses merchants take are as a consequence of:
-
Liquidity sweeps
-
Early spikes
-
Small pullbacks
-
Unfold fluctuations
-
Structural retests
These actions are captured inside your MAE historical past.
In case your cease avoids the MAE zone, you keep away from 70–80% of pointless losses.
🧮 Step 5: Alter Lot Measurement Based mostly on MAE, Not Emotions
In case your MAE tells you a 20–25 pip cease is logical:
Scale back lot measurement accordingly.
Instance:
Threat: $50 per commerce
Cease: 25 pips
Lot = $50 ÷ 25 = 0.20 lot
By no means shrink the cease to extend lot measurement.
Improve data → preserve cease → cut back measurement.
🚀 Takeaway
MAE is the invisible enemy of most merchants.
You’re not dropping as a result of your technique is fallacious —
you’re dropping as a result of your stops are contained in the pure motion of your system.
When you measure MAE and place stops past it, your accuracy skyrockets and stop-outs drop dramatically.
That is how professionals engineer consistency.
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