Equity Curve

An equity curve is a chart of account equity over time, plotting the running value of a trading account after every closed trade or at the end of each day. It is the single clearest picture of how a strategy actually behaves: a smooth rising line suggests consistency, while deep dips and long flat stretches reveal drawdowns and losing streaks that a headline profit figure hides. Traders read the shape as much as the endpoint — the depth and duration of declines, how quickly new highs are reclaimed, and whether results come from many small wins or a few outliers. Equity curves are also used to compare live results with backtested performance.