It is very important to keep statistics for every trade that you execute. If you are a daytrader then record the bar data from your trade entry until your eventual exit. Start an excel database with all the stats. One of the key statistics is the Maximum Adverse Excursion(MAE) . Maximum Adverse Excursion is the maximum loss of a trade after entry. If you are long then it is the lowest low after your entry bar. If you are short then it is the highest high after your entry bar. It is a powerful piece of information. Unlocking its secret can dramatically improve your trading results.

MAE and Stops

The starting point for sorting the database is always by winning trades. Finding all the characteristics of winning trades will improve your results. Identifying winning trades early is the number one goal. After sorting the database by winning trades only, look at the MAE data. Note the average MAE and the max MAE. The max MAE of the winners will probably be less than average MAE of the losers. Your stop for every trade can now be moved to the max MAE. It will lower your average loss and not effect your winning percentage. This one quick move can improve your trading results by at least 25%.