Equity curve

A time series showing how the value of a strategy or account changes.

An equity curve is a time series of account or strategy value. In a backtest it normally starts at the configured initial capital and changes as simulated positions produce profits, losses and costs.

Illustrative equity curve normalized to starting capital, rising to +18.3% with an intervening drawdown

Its shape reveals information hidden by a final return, including volatility, flat periods, drawdowns and whether performance depends on a small number of events.