Paul Joshua_ Johnson

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What is equity curve analysis in forex strategy evaluation?

Equity curve analysis plots account balance over time, revealing growth and drawdowns. Institutions monitor smoothness, consistency, and recovery periods. Retail traders can use equity curve slope and stability as health indicators. Benefits: visual insight into performance trends. Risks: curves can be manipulated in marketing or curve-fitted to past data. A strong equity curve has steady growth with manageable drawdowns. An erratic one signals instability. For forex traders, equity curves act like medical charts—they reveal the health of a system at a glance.