What does it mean when someone says you're an ace?

Could you please elaborate on the phrase "you're an ace"? What context is it typically used in? Is it a term of endearment, admiration, or perhaps something else entirely? Does it carry a positive or negative connotation? How does it differ from other similar expressions of praise or approval? Understanding the nuances of this phrase would greatly enhance my ability to communicate effectively in various social and professional settings.