trade-idea scorecard — how an idea is graded against the path that followed

Trade-idea scorecard: path outcome, R-multiple and excursion

A trade idea names three prices: entry, target, and stop. The price path is walked bar by bar and the read is checkable — target first, stop first, or open if neither by the horizon — alongside the signed R-multiple (profit or loss measured in units of the risk taken), the maximum favorable and adverse excursion (MFE/MAE — the best and worst unrealised move before the trade resolved), and the time-to-target.

AAPLentry ≈ $256.69real

hindsight demo

These levels come from a default rule — entry = an early bar's close, 5% stop, 2R target — not from a published idea. They are constructed in hindsight from the same window the grade replays, so the outcome is illustrative: it demonstrates the grading math, and no realized win is claimed.

TARGET FIRST

Price reached the rule's target on bar 42 without first hitting the stop.

Rule outcome +2.00R

⚐Clean win — Drew down only −0.99R on the way to target — the entry was timed close to the turn.

Entry$256.69

Target$282.35

Stop$243.86

Reward : Risk2 : 1

R-multiple+2.00R

MFE (favorable)+2.08R

MAE (adverse)-0.99R

Bars to target42

excursion before the trade resolved — best and worst unrealised move

entry

← -0.99R worst (MAE)best +2.08R →

this long call WON, hitting target on bar 42 for +2.00R.

We grade a published idea against the price path that actually followed — no moving the goalposts. The verdict, the R-multiple, and the MFE/MAE are real, re-derivable math; only the price path is synthetic when no real OHLC is supplied (and it is labeled).

The idea as it was published

A long (betting it rises) call: enter at $256.69, take profit at $282.35, cut the loss at $243.86. That is a 2-to-1 reward-to-risk plan.

Every honest trade idea names three prices up front: where you get IN (entry), where you cash a WIN (target), and where you admit you were wrong and get OUT (stop). The distance from entry to stop is your "1R" — one unit of risk. We grade the call only against the levels it actually published, so it cannot be moved after the fact.

→ A favorable plan: it risks $1 to make $2.

Verdict: WIN

Price reached the $282.35 target on bar 42 WITHOUT first hitting the $243.86 stop. Realized +2.00R.

The rule is mechanical and pessimistic: we walk the price path bar by bar and record whichever of the two levels — target or stop — the price TOUCHED first. If a single bar's range spans both, we assume the STOP filled first, because OHLC data cannot prove the optimistic order and we refuse to cherry-pick.

→ A clean, verifiable win — this is the kind of outcome that lifts an author's shrunk hit-rate.

How much heat did it take? (MFE / MAE)

Best-case it ran +2.08R in your favor (MFE) and worst-case it dug -0.99R against you (MAE) before resolving.

MFE (Maximum Favorable Excursion) is the furthest the trade ever moved in your favor; MAE (Maximum Adverse Excursion) is the furthest it moved against you. Together they tell you whether a winner was comfortable or white-knuckle, and whether a loser ever looked promising — priceless for sizing your stops next time.

→ A win, but it nearly stopped you out first — the stop was well-placed.

Glossary

R / R-multiple: One "R" is the dollar distance from entry to stop — your unit of risk. A result of +2R means it made twice what it risked; -1R means it lost exactly what it risked.
Reward-to-risk: How many dollars of target gain you stand to make for each dollar of stop loss you accept. Higher is a better-shaped bet.
MFE: Maximum Favorable Excursion — the furthest price ever moved in your favor during the trade.
MAE: Maximum Adverse Excursion — the furthest price ever moved against you during the trade.