Compounding Calculator for Traders
This compounding calculator shows what a trading account would grow (or shrink) to if it earned the same percentage every period. Enter a starting balance, a return per trading day, week, month or year, the number of periods and an optional deposit or withdrawal each period. It returns the ending balance, the growth excluding deposits, the multiple of your starting balance, the equivalent yearly rate and how many periods it takes to double. It is useful mainly as a reality check: the numbers show how demanding a steady 1% a day or 10% a month really is.
| month | Paid in | Balance |
|---|---|---|
| 3 | €5,000.00 | €5,306.04 |
| 6 | €5,000.00 | €5,630.81 |
| 9 | €5,000.00 | €5,975.46 |
| 12 | €5,000.00 | €6,341.21 |
| 15 | €5,000.00 | €6,729.34 |
| 18 | €5,000.00 | €7,141.23 |
| 21 | €5,000.00 | €7,578.33 |
| 24 | €5,000.00 | €8,042.19 |
| 27 | €5,000.00 | €8,534.43 |
| 30 | €5,000.00 | €9,056.81 |
| 33 | €5,000.00 | €9,611.16 |
| 36 | €5,000.00 | €10,199.44 |
This is arithmetic, not a forecast: it assumes the same return every period, no losing runs and no costs. Real trading returns vary and can be negative, and most retail CFD accounts lose money.
How to use the compounding calculator in 4 steps
- Enter the starting balance and currency. Type the balance you start with. The currency only changes how results are displayed; no exchange rate is used.
- Enter the return per period. Type the percentage gained (or lost, as a negative number) each period, and choose whether a period is a trading day, a week, a month or a year.
- Enter the number of periods and any deposits. Type how many periods to run, for example 36 months or 250 trading days. Add a regular deposit, or a negative number for regular withdrawals.
- Read the result and the table. The result shows the ending balance, the growth excluding money paid in, the multiple, the yearly equivalent and the doubling time. The table shows the balance at up to 12 points along the way.
The compounding formula
Compounding means each period’s return is earned on the balance including earlier gains. Without deposits, the balance after n periods at a return r per period is:
Ending balance = Starting balance × (1 + r)^n
With deposits : balance(each period) = previous balance × (1 + r) + deposit
Yearly rate = (1 + r)^(periods per year) − 1
Doubling time = ln 2 ÷ ln(1 + r) ≈ 72 ÷ (r in %)The calculator applies the return first and then adds the deposit, so money paid in starts earning from the following period. It uses 250 trading days, 52 weeks or 12 months a year for the yearly equivalent.
What common targets really compound to
Starting balance €5,000, no deposits, no costs, and no losing periods (which is the unrealistic part):
| Return | Over | Multiple | Ending balance | Yearly equivalent |
|---|---|---|---|---|
| 1% a month | 36 months | 1.43× | €7,153.84 | 12.7% |
| 2% a month | 36 months | 2.04× | €10,199.44 | 26.8% |
| 10% a month | 36 months | 30.9× | €154,563.40 | 213.8% |
| 1% a day | 250 trading days | 12.0× | €60,160.78 | 1,103.2% |
The bottom two rows explain why “1% a day” and “10% a month” promises on social media should be treated as a red flag rather than a target. A steady result of that size would turn small accounts into fortunes within a couple of years; if it were repeatable, the people selling it would not need your subscription. See forex scam red flags.
Why real returns compound to less
Losses weigh more than gains. A 10% gain followed by a 10% loss leaves 99% of the balance; a 50% gain and a 50% loss leave 75%. The bigger the swings, the larger this drag, so two strategies with the same average monthly return end up in different places if one is more volatile. The drawdown and recovery guide shows how much it takes to climb back from a loss.
Higher targets need higher risk. To make 10% a month with trades that risk 1% each and win twice what they lose, you need a lot of winning trades every month. Most traders who chase such numbers raise the risk per trade instead, and that sharply raises the chance of a deep drawdown; see risk of ruin explained and the risk–reward ratio.
Costs come off every period. Spreads, commissions and overnight financing reduce each period’s return before it compounds. Enter a lower return to approximate them.
Most retail CFD accounts lose money. Brokers’ own disclosures typically put the share between about 60% and 80%. A compounding calculator shows arithmetic, not a likely outcome; read why most retail CFD traders lose before planning around any figure.
Using the calculator sensibly
- Model a range rather than one number: try 0%, a modest positive return and a negative return.
- Enter a negative return for a few periods to see what a losing run does, then a positive one to see how long the recovery takes.
- Use deposits to compare saving into an account with relying on returns alone; often the deposits do most of the work.
- Size each trade from your stop, not from a growth target, with the position size calculator.
For the full argument, with more worked examples, read realistic trading returns and compounding.
Frequently asked questions
What does 1% a day compound to?
About 12 times the starting balance over 250 trading days: 1.01^250 = 12.03, so €5,000 would become about €60,161, an annual rate of roughly 1,103%. It takes about 70 trading days to double. That arithmetic is why claims of a steady 1% a day deserve scepticism: no losing days and no drawdowns are assumed.
How long does it take to double an account at 2% a month?
About 35 months. The exact figure is ln 2 ÷ ln 1.02 = 35.0 months; the rule of 72 gives 72 ÷ 2 = 36. €5,000 at 2% a month for 36 months becomes €10,199.44, and 2% a month is equivalent to about 26.8% a year.
Why does a gain followed by an equal loss leave me behind?
Because percentages apply to different balances. +10% then −10% leaves 1.10 × 0.90 = 0.99, a 1% loss; +50% then −50% leaves 0.75, a 25% loss. Uneven returns compound to less than their average suggests, which is one reason a steady figure in a compounding calculator overstates real results.
How do deposits change the result?
Each deposit starts compounding from the period it is added. €5,000 at 2% a month with €200 added every month for 36 months reaches about €20,598, of which €12,200 is money paid in and about €8,398 is growth. Enter a negative deposit to model regular withdrawals.
Is a return of 10% a month realistic?
Kept up for long, almost certainly not. 10% a month for 36 months is 1.1^36 = 30.9 times the starting balance, around 214% a year. Reaching that usually means risking far more per trade, which raises the chance of a deep drawdown. Most retail CFD accounts lose money; treat any steady high monthly figure, including your own backtest, with suspicion.
Does the calculator include trading costs?
No. Spreads, commissions, overnight financing and taxes are not included, and neither are losing periods. Enter a lower return to approximate costs, or a negative return to see what a run of losing months does to the balance.
Risk warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This calculator shows the arithmetic of a fixed return and is not a forecast or a suggested target. The PIP Report is a publisher of financial information and education and is not authorised or regulated by CySEC or any other financial regulator. See the full risk warning and our editorial policy.
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Not investment advice. This is general information and education, written without knowledge of your circumstances. It is not a recommendation to buy or sell any instrument. Past performance is not a reliable indicator of future results. Trading leveraged products carries a high risk of losing money. Risk warning