Compounding is reinvesting each period’s gains so that the next period earns a return on a larger balance — the mechanism behind every long-term equity curve. Set a starting balance, a realistic percentage return per period and a horizon to see exactly how an account grows, with an optional regular deposit, a full period-by-period table and a live equity curve.
Each period the balance grows by the return rate, then any deposit is added. Because the next period compounds on the new, larger balance, growth accelerates over time:
Each period: gain = balance × (rate ÷ 100) new balance = balance + gain + deposit Closed form (no deposits): final = start × (1 + rate ÷ 100) ^ periods Example — 1,000 at 5% per month for 12 months, no deposits: = 1,000 × (1.05) ^ 12 = 1,795.86 (a 79.6% gain on the starting balance)
Compounding only works if each trade is sized correctly. Use the position size calculator to risk a fixed percentage per trade, the profit & loss calculator to project individual trades, and keep an honest record in the trade journal so your assumed return reflects real performance.
Use a figure you can realistically sustain after losing trades and drawdowns — for many traders that is a low single-digit monthly percentage. The point is consistency, not a headline number.
Yes. Each deposit is added at the end of its period, then earns the return rate from the next period onward, just like the reinvested gains.
Because each period earns a return on a larger balance than the last. That feedback loop is what makes the equity curve exponential rather than a straight line.