The most important metric you should use to evaluate your strategies isn’t a metric at all.
It’s a picture.
The equity curve conveys so much more information than a single number.
It shows you where you’ll be overconfident and where you’ll feel like quitting.
Every trader who ever quit trading did so during a drawdown.
Why? Because they didn’t have enough confidence in their system to trade through it.
The equity curve is the first thing I look at when evaluating a strategy.
Because it’s showing you all the points in time when doubt will creep in, and you’ll feel like reducing your position size.
The hardest part of trading is trading through drawdowns.
Evaluating a strategy using a single metric (or even a few metrics) hides all the important details.
The equity curve tells you a story – you should listen to it!
Announcement: This coming Monday I’ll be doing a free webinar with Interactive Brokers called Creating a Trading Strategy That Can Work which will show you how to create your own profitable trading strategies.
It’s the proven process I’ve used for 20 years to create my strategies.
The webinar is on Monday, 6/16/2025 at 2pm ET. Even if you can’t attend live, go ahead and register so you can be notified of the recording and watch it afterward at your leisure.
This is not a sales call masquerading as a webinar – this is practical advice to apply to your own trading.
I hope to see you there.
-Dave
