Definition
The average maximum dollar amount a trade moved against you before being closed.
Formula
Avg $ Position MAE = (Sum of Position MAE on All Trades) / (Total Number of Trades)
Example
Let’s say you have the following MAE data for your trades:
- Trade 1: MAE of $100
- Trade 2: MAE of $70
- Trade 3: MAE of $150
- Trade 4: MAE of $120
Your Avg $ Position MAE would be: ($100 + $70 + $150 + $120) / 4 = $110
Key Points
- Risk Management: Helps you assess how large your typical drawdowns are. This information can be used to refine your stop-loss strategies.
Considerations
- MAE Calculation: Ensure you understand how position MAE is calculated within TraderSync.
