Plotting Account Balance and Equity to Inspect Drawdown

Summary

The indicator plots a trading account’s balance and equity as separate time series in a chart window. Balance reflects the account value excluding unrealized position changes, while equity fluctuates with those changes. Viewing both lines together can help a trader inspect drawdown and see how open positions affect account value during a run or backtest.

The document says the indicator reads account values dynamically and cannot reconstruct values from before it was attached to the chart. Its historical view therefore begins only at attachment, which limits its use for reviewing earlier account history. The author presents it as especially useful during backtests, where the chart can be zoomed to examine drawdown more closely. No quantitative examples, validation, or comparison with other reporting methods are provided; the usefulness depends on attaching it before the period of interest and on the platform’s account data.

Key ideas

• The indicator displays account balance and equity as separate lines over time.
• Equity fluctuations reveal the effect of unrealized gains and losses on account value.
• The plotted history begins when the indicator is attached because earlier values are unavailable.
• The chart can help inspect drawdown during backtests, subject to that history limitation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.