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What is an Equity Curve?

Equity is a common accounting concept. Equity is defined as Assets minus liabilities. i.e. What you own minus what you owe.

If you are not using any borrowed money to invest, you simply revalue all of your investments each day, week or month and add any cash reserve. That total is you equity. You would normally chart your equity as a line chart or as a histogram.

If you are investing with borrowed money, you would subtract what you have borrowed from the total value of your investments and cash reserve.

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