Analytics

Understanding Your Equity Decomposition Dashboard

Learn how to read the equity decomposition waterfall chart and identify your primary P&L drivers.

The equity decomposition dashboard breaks your overall P&L into its component parts, showing exactly where profits originate and where losses accumulate.

Accessing the Dashboard

Navigate to Analytics then Equity Decomposition. The dashboard requires at least 20 trades across 2 or more strategies or instruments.

The Waterfall Chart

The primary view is a waterfall chart showing how each component contributes to your total P&L:

Green bars: Positive contributors (strategies, instruments, or time periods that added to your bottom line)

Red bars: Negative contributors (components that subtracted from your P&L)

Final bar: Your net total—the sum of all contributions

Reading the Waterfall

Start from the left. Each bar shows the incremental impact of that component. A tall green bar for "Momentum Strategy" followed by a smaller red bar for "Reversal Strategy" tells you exactly where your money is being made and lost.

Decomposition Views

By Strategy

Shows each trading strategy as a separate bar. Immediately reveals:

Which strategies are net profitable

The magnitude of each strategy's contribution

Whether one strategy is subsidising others

By Instrument

Shows contribution by traded instrument. Look for:

Instruments with persistent negative contribution (consider removing them)

Your top contributing instruments (consider increasing allocation)

Instruments with high variance (contributing or detracting depending on period)

By Direction

Compares long versus short trade contributions. Many traders discover their shorts are a net drag on performance—valuable information for adjusting approach.

By Time Period

Breaks contribution by month, week, or custom period. Reveals seasonal patterns and regime sensitivity.

The Stacked Area Chart

Switch to the Cumulative tab to see a stacked area chart where each colour represents a component layered on top of each other. This shows how contributions evolve over time rather than as a static summary.

Fee Impact Layer

Enable the Fees toggle to add a fee layer to the decomposition. This shows:

Total fees paid

Fees as a percentage of gross profit

Which instruments or strategies incur the highest fees relative to returns

Using Decomposition for Decisions

Capital Reallocation

If Strategy A contributes 70% of profits with 30% of capital, and Strategy B contributes 5% with 40% of capital, the decomposition makes the reallocation decision straightforward.

Pruning

If an instrument has been a net negative across your entire history, remove it. The decomposition makes this clearly visible rather than hidden within an aggregate equity curve.

Early Warning

When a previously green component turns red, it signals a change. This early warning lets you investigate and adapt before the impact grows.

For a deeper exploration of P&L drivers, read our blog post on [Equity Decomposition: Understanding Your P&L Drivers](/blog/equity-decomposition-pnl-drivers).