How does compounding work in trading?

Compounding means each month's return is earned on the balance including previous gains. $10,000 growing 2% a month becomes about $20,400 after 36 months, not $17,200 as simple interest would give. The calculator shows this month by month.

Is 10% a month realistic?

Sustained over time, almost never. 10% a month compounds to about 214% a year. Top long-term investors have averaged closer to 20-30% a year, and broad stock markets roughly 7-10%. Offers that promise steady high monthly returns are a common warning sign of scams.

What does the yearly equivalent mean?

It is the yearly return produced by compounding the monthly rate 12 times: (1 + monthly rate)¹² − 1. 1% a month is about 12.7% a year, 2% about 26.8% and 5% about 79.6%.

Why include monthly fees?

Platform subscriptions, signal services, VPS hosting, data feeds and withdrawal charges come out every month whatever the result. On a small account they can cancel out most of the growth, which the calculator makes visible.

Does this show real trading results?

No. It assumes the same return every month, which does not happen in real trading. Use it to understand compounding and set realistic goals, and use the Drawdown Calculator to see how losing months affect the path.

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Compounding Calculator

Monthly growth with deposits, fees and a reality check. No login, nothing about you is collected.

Starting balance (USD)

Account currency

Return per month

Number of months

Monthly deposit (USD)

Monthly fees (USD)

Subscriptions, VPS, data, withdrawals.

Illustrative balance after 36 months

$20,399

2.04× the $10,000 you put in, if every single month returned exactly 2%.

Growth from returns

$10,399

before fees

Total put in

$10,000

starting balance

Yearly equivalent

26.8%

2% a month, compounded

Doubles in

35 mo

from returns alone

Growth over time

Orange: illustrative balance. Grey line: money you put in.

Reality check: 2% a month is about 27% a year

Ambitious: few professionals sustain this

Very few fund managers keep returns above 15-20% a year for a decade. Real trading also has losing months, which compounding projections do not show.

A steady monthly return is a simplification. Real trading results go up and down, and a few bad months can undo many good ones. See the Drawdown Calculator.

Illustrative projection only. Assumes an identical return every month, which real trading does not deliver. Past or projected returns are not a guide to future results. Not investment advice and not a guarantee of any outcome.

Your inputs live only in the page address once you change them.

Small rates, long time

Compounding rewards consistency more than size. A modest return kept for years, without large drawdowns, usually beats a high return that comes with deep losses. The reality check panel compares your rate with long-run results so goals stay grounded.

Balance next month = balance × (1 + monthly return) + deposit − fees

Protect the base

One bad month can undo a year of compounding. See how much it takes to recover a loss in the Drawdown Calculator, and check that a broker is properly regulated before depositing with Check a Broker.

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