Equity Curve
A chart plotting account balance over time across all trades, showing the overall trajectory and drawdown periods of a trading strategy.
The equity curve is a line chart of cumulative account value plotted against time or trade number. It is the most visually immediate way to assess a strategy: a smooth, upward-sloping curve with shallow drawdowns is the goal.
Many systematic traders use the equity curve itself as a signal — trading at reduced size when the curve is in a downtrend (below its own moving average) and full size when trending up. This meta-rule reduces drawdowns during system degradation.