plotMAEGraph issue

Posted By: nanotir

plotMAEGraph issue - 10/04/15 08:42

Hi

I am playing with plotMAEGraph and the script Workshop5_2.
The x axys represents the MAE then if I reduce the stop to 50*PIP, it should not be any red dots after the 50 value in the x axys. However the dots are still there.
I dont understand why.
I understand the MAE as the worst loss that a trade produces while it is open and before it comes back again. So a trade can go down by -200pips and then go up and close at -30pips. Then the MAE is 200pips. If the stop is at 100pips, the MAE should not cross that border.
Posted By: jcl

Re: plotMAEGraph issue - 10/05/15 08:53

The MAE can be, and usually is, a lot larger than the stop distance.

The stop distance is the maximum loss of a trade, while the MAE is the maximum drawdown from a previous high - and that's the reason why you do MAE graphs at all. If the MAE were just the stop distance, the graph would be quite boring.
Posted By: nanotir

Re: plotMAEGraph issue - 10/05/15 10:52

Hi

Thanks for the explanation. laugh
I did not get the "maximum drawdown from a previous high" when I read it in the tutorial.
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