What Is an Equity Curve?
An equity curve is the chart showing the evolution of a trader's capital trade by trade. It is the most honest visual representation of a strategy's performance — far more informative than just the month's final result.
What a Healthy Equity Curve Looks Like
- Upward trend: the general line rises over time, even with oscillations
- Controlled drawdowns: reasonable dips followed by recovery
- Consistency: relatively uniform peaks and troughs — no isolated extreme wins or losses
Warning Signs in an Equity Curve
- Sharp prolonged decline: market changed and strategy has not adapted
- Gains concentrated in few trades: no real consistency
- Chaotic oscillations: inconsistent risk management or overtrading
Equity Curve and Prop Firms
FTMO and other prop firms analyze traders' equity curves. Gains highly concentrated in a few days can trigger inconsistency flags — even with a positive final result. The ideal curve shows gradual, steady growth.
Using the Curve to Make Decisions
Curve trending down 3 weeks: time to review the strategy, not increase lot size. Consistent uptrend: maybe time to gradually scale risk. The equity curve tells a story that isolated numbers cannot.
Visualizing Your Equity Curve
ForexTracker automatically generates the equity curve chart from logged trades, displaying peaks, troughs, and historical maximum drawdown — transforming raw data into actionable visual insights.
Visualize your equity curve and analyze your strategy. Access app.forextracker.com.br for free.