What is an Equity Curve in Trading?

An equity curve is a graph showing how a trading account’s equity changes as trades are completed. For example, 

• Suppose a trading system starts with ₹5 lakh.
• However, subsequent realised profits and losses take the account to ₹5.2 lakh, ₹4.9 lakh, ₹5.4 lakh, and ₹5.6 lakh.
• Now, plotting these values produces the equity curve.

How to Perform an Equity Curve Analysis?

As per general market understanding, an equity curve can be analysed for the following parameters:

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