Equity Curve

Equity Curve - The line graph or sequence that represents the strategy’s account equity over time during the backtest. It plots the value of the trading account (realized profits/losses and sometimes unrealized P/L) as trades progress. A steadily rising equity curve with mild fluctuations is desirable, whereas a jagged curve with deep troughs indicates high volatility or risk in the strategy. Traders use the equity curve to visualize performance consistency and identify periods of stress (e.g., major drawdowns).