Compounding Calculator
See how your trading account can grow with consistent compound gains over time.
Growth Parameters
Understanding Compound Growth
- Compounding means your profits generate more profits over time.
- 5% monthly doesn't equal 60% yearly – it's actually 79.59% due to compounding!
- Be realistic – consistent 5-10% monthly returns are extremely rare.
- Consider drawdowns – use our Drawdown Calculator to see the flip side.
What is a Compounding Calculator?
A compounding calculator shows how reinvesting your trading profits can accelerate account growth exponentially over time. Instead of withdrawing gains, you trade with increasingly larger positions.
This tool helps you set realistic growth targets and understand the power of consistent returns compounded over weeks, months, or years.
Key Features
- Monthly/weekly compounding
- Customizable return rates
- Multiple period projections
- Starting capital options
- Goal-based calculations
- Visual growth charts
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Frequently Asked Questions
Compounding means your gains generate more gains. A $10,000 account growing 5% monthly becomes $17,959 in 12 months—not $16,000 as simple interest would suggest. The difference grows dramatically over time.
10% monthly (214% annually) is extremely aggressive and rarely sustainable. Most professional traders target 3-5% monthly. Use conservative estimates for planning; you can always exceed them.
Not necessarily. Many traders use a hybrid approach: reinvest 50% and withdraw 50%. This grows the account while providing income. Full reinvestment maximizes growth but delays rewards.
Losses are devastating to compound growth. A 20% drawdown wipes out months of 3% gains. This is why risk management is more important than maximizing returns when compounding.