1. Pick a realistic rate
Use the average gain per period from your own journal, not a target. Small, consistent percentages compound; large ones usually come with large drawdowns.
Free forex tool
Forex compounding calculator
See how a trading account could grow if a fixed percentage gain is reinvested every period, with optional deposits. Free, no account needed — and an honest reminder of how much rate assumptions matter.
Final balance
$1,425.76
Total contributed
$1,000
Total gain
$425.76
| Period | Gain | Balance |
|---|---|---|
| 1 | $30 | $1,030 |
| 2 | $30.9 | $1,060.9 |
| 3 | $31.83 | $1,092.73 |
| 4 | $32.78 | $1,125.51 |
| 5 | $33.77 | $1,159.27 |
| 6 | $34.78 | $1,194.05 |
| 7 | $35.82 | $1,229.87 |
| 8 | $36.9 | $1,266.77 |
| 9 | $38 | $1,304.77 |
| 10 | $39.14 | $1,343.92 |
| 11 | $40.32 | $1,384.23 |
| 12 | $41.53 | $1,425.76 |
A period can be a day, week or month — keep the rate and deposits in the same unit. Projections assume the same gain every period, which real trading never delivers. Educational tool only — not financial advice.
How compounding works in trading
2. Reinvest each period
Compounding means each period's gain is calculated on the new balance, including previous gains and any deposits you add.
3. Stress-test it
Run the same numbers with a lower rate. Real trading has losing months, so treat any projection as a best case, never a promise.
Worked example
$1,000 at 3% a month for 12 months grows to about $1,426 — a 42.6% gain rather than 36%, because each month's gain is earned on a larger balance. At 1% a month the same account ends near $1,127.
The formula is balance × (1 + rate)periods. Compounding only works if losses stay small: a 20% drawdown needs a 25% gain just to get back to even. That is why position sizing and a journal matter more than the growth rate you hope for.