Equity Curves by Malcolm Morley

Equity Curves by Malcolm Morley

It is one of my contentions that one of the most important things a trader can do is accurately plot his or her equity curve. The process takes little to no effort once you have set yourself up (I use Excel).

It is one of my contentions that one of the most important things a trader can do is accurately plot his or her equity curve. The process takes little to no effort once you have set yourself up (I use Excel). Again, IMHO, I believe this should be in percentages, not dollars. Looking at our trading accounts in dollar terms reinforces a whole load of psychological problems that will obstruct us from ever trading decent size, so I advocate tracking your ‘cumulative daily percent’ as I do in my monthly reports, published here. Obviously tracking return on original investment is simple, but once you start making capital adjustments, you will need slightly more complex calculations. For those interested, I explained how I do it here (posts 40 and 43).

I have lived and breathed trading ever since trading fx professionally in London, Toronto and Philadelphia in the early 70’s (yes I know that shows my age!). While my professional career subsequently took me from the trading desk to designing treasury systems for some of the world’s leading financial institutions, my desire was to always trade for myself. As a consequence, following 5 years with a major international stock-broker

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