Forex WizardForex Compounding Calculator
Model how your trading account grows over multiple periods with compounding returns, deposits, withdrawals, fees and losing periods. Compare compounded vs simple growth, view interactive charts and export results to CSV.
This calculator performs hypothetical compounding mathematics only. It does not predict future trades or guarantee any rate of return.
Calculator Inputs
Cash Flows & Fees (Advanced)
FINAL PROJECTED BALANCE
$1268.24
Net: +$268.24 (26.82%)
Initial Balance
$1000.00
Total Deposits
$0.00
Total Withdrawals
$0.00
Total Fees
$0.00
Contributed Capital
$1000.00
Simple Growth Balance
$1240.00
Highest Balance
$1268.24
Lowest Balance
$1000.00
Max Drawdown
0.00%
Recovery Gain
0.00%
Best Period
2.00%
Worst Period
2.00%
Balance Growth: Compound vs Simple
Drawdown From Peak (%)
Period-by-Period Breakdown
| # | Opening | Deposit | Withdraw | Return % | Fees | Closing | Drawdown % |
|---|---|---|---|---|---|---|---|
| 1 | $1000.00 | — | — | +2.00% | — | $1020.00 | — |
| 2 | $1020.00 | — | — | +2.00% | — | $1040.40 | — |
| 3 | $1040.40 | — | — | +2.00% | — | $1061.21 | — |
| 4 | $1061.21 | — | — | +2.00% | — | $1082.43 | — |
| 5 | $1082.43 | — | — | +2.00% | — | $1104.08 | — |
| 6 | $1104.08 | — | — | +2.00% | — | $1126.16 | — |
| 7 | $1126.16 | — | — | +2.00% | — | $1148.69 | — |
| 8 | $1148.69 | — | — | +2.00% | — | $1171.66 | — |
| 9 | $1171.66 | — | — | +2.00% | — | $1195.09 | — |
| 10 | $1195.09 | — | — | +2.00% | — | $1218.99 | — |
| 11 | $1218.99 | — | — | +2.00% | — | $1243.37 | — |
| 12 | $1243.37 | — | — | +2.00% | — | $1268.24 | — |
For position sizing, use the Lot Size Calculator. For trade payoff geometry, the Risk Reward Calculator. For drawdown risk across many trades, the Risk of Ruin Calculator. For broader risk management, the Risk Management Guide.
How to Use the Forex Compounding Calculator
Mode 1 — Standard Compounding: Enter your initial balance, a constant return per period (e.g. 2%), the number of periods and the compounding frequency. The calculator applies the return to the current balance each period.
Mode 2 — Variable Returns: Enter an individual percentage return for each period (comma or line separated). Positive, negative and zero values are supported. This lets you model realistic sequences with winning and losing periods.
Mode 3 — Win/Loss Simulation: Enter your win rate, average winning-period return, average losing-period return and a seed. The calculator uses a seeded PRNG to simulate which periods are wins and which are losses. Same seed = same result.
In all modes, you can add recurring deposits, recurring withdrawals, a fixed fee per period and a percentage fee. The calculation order is: opening balance → deposit → withdrawal → period return → fixed fee → percentage fee → closing balance.
How Does Forex Compounding Work?
Compound Growth (per period)
Balance × (1 + r)^n
r = return per period as decimal, n = number of periods
Period Return Amount
Balance × (r / 100)
Applied after deposits and withdrawals
Simple Growth (non-compounded)
Initial + Σ(Initial × r_i)
Returns based on initial balance, not current balance
Drawdown
(Peak − Current) / Peak × 100
Measured from the highest modeled balance
Recovery Gain
Drawdown / (1 − Drawdown)
Gain needed to return to the pre-drawdown peak
Example: $1,000 at 2% per period for 12 periods = $1,000 × (1.02)^12 ≈ $1,268.24. This is compounded growth. Simple growth would be $1,000 + (12 × $1,000 × 0.02) = $1,240.00 — the difference grows over time.
Daily vs Weekly vs Monthly Compounding
The compounding frequency determines what one "period" means in the calculator. If you select daily with 2% per period, that means 2% per modeled trading day. If you select monthly, 2% means 2% per modeled trading month.
Do not assume that 2% daily is equivalent to 2% monthly — they are very different. 2% daily over 20 periods produces $1,000 × (1.02)^20 ≈ $1,486. 2% monthly over 20 periods produces the same result, but the real-world time elapsed is very different.
The assumed rate must correspond to the selected period. A realistic monthly return of 2% is very different from a realistic daily return of 2%.
Compounding vs Simple Returns
Compounded growth applies each period's return to the current balance. Simple growth applies each return to the initial balance only. Over time, compounding produces a higher balance when returns are positive — but it also produces deeper losses when returns are negative.
Example: $1,000 at 5% per period for 10 periods. Compounded: $1,000 × (1.05)^10 ≈ $1,628.89. Simple: $1,000 + (10 × $1,000 × 0.05) = $1,500.00. The difference ($128.89) is the compounding effect.
The calculator shows both side by side in the chart and the summary metrics.
Why Losing Periods Matter
A 10% gain followed by a 10% loss does not return you to your starting balance. Starting with $1,000: a 10% gain gives $1,100. A 10% loss on $1,100 is $110, leaving $990 — not $1,000.
This asymmetry means losing periods have a larger impact than they appear. A 50% drawdown requires a 100% gain to recover. The calculator tracks the maximum drawdown and the recovery gain required.
How Deposits and Withdrawals Affect Growth
Deposits increase the balance that future returns compound on, but they are not trading profit. The calculator separates total contributed capital (initial balance + deposits) from net gain/loss (which is trading performance only).
Withdrawals reduce the compounding base and cannot exceed the available balance. If a withdrawal would exceed the balance, it is capped at the available amount.
Do not label growth caused by deposits as trading profit. The net gain/loss metric excludes deposits and withdrawals so you can see pure trading performance.
Common Forex Compounding Mistakes
Assuming guaranteed daily returns
Daily compounding refers to one modeled trading period. Real trading has losing days, weeks and months. The calculator includes negative returns for exactly this reason.
Ignoring losing periods
A 10% gain followed by a 10% loss leaves you with 99% of your starting balance — not 100%. Losing periods compound too, and the calculator shows this effect.
Overleveraging
Higher returns per period can produce dramatic projections, but they also increase the impact of losing periods. A single large loss can wipe out months of compounding.
Ignoring spreads and fees
Commission, spread and swap reduce net returns. The calculator includes fixed and percentage fees so you can see their compounding impact.
Counting deposits as trading profit
Deposits increase your balance but are not trading performance. The calculator separates contributed capital from net trading gain/loss.
Unrealistic return assumptions
Modeling 5% per period over 100 periods produces exponential growth that is not representative of real trading. Use conservative assumptions and include losing periods.
Assuming past results predict future performance
The calculator models hypothetical scenarios. Historical win rates and average returns do not guarantee future outcomes.
Related Forex Wizard Tools
- Lot Size — XAUUSD Lot Size Calculator: "What position size corresponds to my chosen account risk?"
- Risk Reward — Risk Reward Calculator: "How does the target distance compare with the stop distance?"
- Risk of Ruin — Risk of Ruin Calculator: "What is the probability of hitting a loss threshold over many trades?"
- Risk Management — Forex Risk Management Guide: Broader account risk framework.
Frequently Asked Questions
What is a forex compounding calculator?
A forex compounding calculator models how a trading account grows (or shrinks) over multiple periods when returns are reinvested. It shows the difference between compounded growth (where each period's return applies to the current balance) and simple growth (where returns apply to the initial balance only). This calculator supports deposits, withdrawals, fees, variable returns and win/loss simulation.
How does forex compounding work?
Compounding means each period's return is applied to the current account balance, not just the initial deposit. If you start with $1,000 and earn 2% per period, after period 1 you have $1,020. Period 2's 2% applies to $1,020 (not $1,000), giving $1,040.40. Over many periods, this creates exponential growth — but the same effect works in reverse during losing periods.
What is the difference between daily, weekly and monthly compounding?
The frequency determines what one 'period' means. If you select daily compounding with 2% per period, that means 2% per modeled trading day. If you select monthly, 2% means 2% per modeled trading month. The assumed rate must correspond to the selected period — 2% daily is very different from 2% monthly. Do not assume they are equivalent.
Why does a 10% gain followed by a 10% loss not return to the starting balance?
Because the loss applies to the larger post-gain balance. Starting with $1,000: a 10% gain gives $1,100. A 10% loss on $1,100 is $110, leaving $990 — not $1,000. This asymmetry is why losing periods matter more than they appear. The calculator shows this effect in the per-period table.
How do deposits and withdrawals affect compounding?
Deposits increase the balance that future returns compound on, but they are not trading profit. The calculator separates total contributed capital (initial balance + deposits) from net gain/loss (which is trading performance only). Withdrawals reduce the compounding base and cannot exceed the available balance.
What is the difference between compounded and simple growth?
Compounded growth applies each period's return to the current balance. Simple growth applies each return to the initial balance only. Over time, compounding produces a higher balance than simple growth when returns are positive — but also deeper losses when returns are negative. The calculator shows both side by side.
Can I model losing periods?
Yes. In Standard mode, enter a negative return per period. In Variable mode, enter a mix of positive and negative returns. In Win/Loss mode, the simulator generates winning and losing periods based on your win rate and average win/loss returns.
Does this calculator predict my future trading results?
No. The calculator models hypothetical scenarios based on assumptions you enter. Real trading results vary, include costs and execution differences, and do not follow a fixed win rate or average return. The results are educational projections, not predictions.
Risk Disclaimer
Trading forex, gold and CFDs involves significant risk and may not be suitable for everyone.
This calculator is provided for educational and informational purposes only and should not be considered financial advice, investment advice or a recommendation to buy or sell any financial instrument.
The compounding projections are hypothetical models based on assumptions you enter. Real trading results vary, include costs and execution differences, and do not follow a fixed return rate. Past results do not predict future performance.
Always perform your own analysis and use appropriate risk management.
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