Forex Compounding Calculator
See what a steady return does to an account when the profits stay in and get traded too. Then see what a realistic return actually is.
Net of losses and costs. A negative number models a losing period.
Growth by
| # | Start | Gain | Deposit | End | Total profit | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| ··· more ··· | |||||||||||
Result
Total profit
Growth
Assumes the same return every period, which no trader achieves. Real results arrive as a mix of winning and losing periods; see the note on realistic returns below.
How compounding works in trading
Compounding means sizing each trade from the current balance rather than the starting one. When the account grows, 1% risk is a larger cash amount, so the same strategy earns more. When it shrinks, 1% is smaller and losses slow down. Position size tracks equity automatically, which is the point of risking a percentage rather than a fixed amount.
Formula
Final balance = Start × (1 + r)n
Example: £1,000 at 3% a month for 24 months is 1,000 × 1.0324 = £2,033. The same 3% taken out each month would total £1,720.
The catch is the "r". A fixed 3% a month is a 42.6% year, which would put a retail trader in the top fraction of a percent. The calculator will happily show you £1,000 becoming a million at 10% a month in six years. The table below shows what sustained returns actually look like, so you can set the rate honestly.