Compounding Calculator

This calculator shows how your account balance grows when you repeat the same percentage gain over a number of periods. A “period” can represent a number of trades or a time interval you want to measure.

For example, 12 periods with a 3% gain per period could mean a 12-trade winning streak with 3% gained per trade or 12 months of earning 3% per month.

The calculator helps you see how profits compound when you follow a consistent strategy, how small regular percentage gains turn into meaningful long-term growth, and what your capital could look like if you maintain the same average return per period.

It’s important to understand that this calculator compounds only the starting balance. It does not include additional contributions.

In reality, compounding becomes far more powerful when you regularly add capital to your investments - even small recurring deposits can accelerate long-term growth by 2-3×.

1. Enter your starting balance.
2. Enter the number of periods you want to simulate. (A “period” can be a number of trades, weeks, months, years, etc.)
3. Enter the expected percentage gain per period.
4. Press Calculate.

The calculator will show your ending balance, total percentage gain, and a breakdown of your balance after each individual period.

Many traders calculate returns in a straight line (for example, “5% per month for 10 months = 50% total return”). However, that’s not how compounding works.

When your balance grows by 5%, your next percentage return applies to a larger amount. The percentage return stays the same, while the dollar return increases with every winning period. This accelerates growth - which is why the final number is higher than linear calculations.

That is the basic nature of compounding: profits allow you to generate more profits, and the effect becomes stronger the longer you continue.

This calculator helps you visualize that process.

Both tools work together, but they measure opposite sides of your trading system.

The Compounding Calculator shows how your account grows when you follow a strategy that produces consistent returns.

The Drawdown Calculator shows how quickly your account can shrink during losing streaks.

Many traders use only compounding calculators and become tempted to increase their risk to “speed up” the growth. The drawdown calculator shows why this approach is dangerous. Increasing risk may boost short-term returns, but it also raises the probability of hitting deep drawdowns - or blowing the account - long before compounding can take effect.

Using both calculators together helps you find the right balance between growth and safety.

This calculator helps you see the bigger picture and understand why you don’t need to take extreme risk or chase unrealistic returns to grow your money.

Even small, steady gains become meaningful when compounded over time. It shifts your mindset away from “get rich quick” expectations and helps you focus on consistency and sustainability.

It’s not a risk-management tool - it’s a planning tool that shows what discipline and consistency can achieve.