Core terms
Maximum favourable excursion (MFE)
The furthest price moved in favour of an open position between entry and exit, measured from the entry fill in cents per share or in R.
For a long, MFE is the highest price while the trade was open minus entry; a long entered at $3.40 that traded $3.61 before the exit has an MFE of 21 cents (Illustrative). MFE makes exit rules comparable on the same entries: a fixed target can be reconstructed exactly (did MFE reach it?), a trailing exit leaves somewhere below MFE by at least the trail distance plus slippage, and a time stop needs the price at the time limit.
End-trade drawdown
End-trade drawdown (ETD) is MFE minus the realized result: how much of the best open profit was given back before the exit. A trade with MFE +2.5R that closed at +0.5R had an ETD of 2.0R (Illustrative). Losers whose MFE exceeded +1R were well in profit and ended in a loss; they are worth counting separately.
What traders should verify
Record MFE for every trade with its window and data resolution, and the median ETD of winners in R. For trailing rules, also record the exit price the rule would have produced.
Do not conflate
Trader usage; there is no official definition. MFE is a best case no exit rule captures in full, so reading it as missed profit is hindsight. Trades exited early had less time to make an MFE; compare exit rules over a fixed window as well.
Primary source
Trader usage: there is no official definition, and platforms and tools may calculate it differently.