Forex Compounding Calculator

A Forex compounding calculator is useful to simulate how compounding the initial equity and the profitable trades, with a set gain percentage, can make a trading account grow over time. It works by simulating the compounding and the reinvesting of the same chosen gain percentage of the account's total equity.

With this calculator traders can input the settings in order to accurately calculate the compounding results of a set of winning trades over a period of time.

The use of this calculator can demonstrate traders how powerful gains compounding can be, and, that even a moderate gain percentage of 2% (for example) per trade, can turn an account’s initial capital into a substantial amount of capital over time.

How to Use the Forex Compounding Calculator

Starting balance: This represents the trader's initial account equity. Let's use, for example, a starting balance of 1,000 units of the account base currency.

Number of periods: In the number of periods field traders can simulate a winning strike of x consecutive winning trades. Let's use, for example, a series of 6 consecutive winning trades.

Gain % per period: The most important field of the calculator! This field can be used to simulate the gain percentage per any period of compounding. It can be used by the trader who does 5 daily trades with a target of 0.05% return per trade. It can also be used by a trader doing 5 weekly trades and targetting 1% return per trade, even a long-term trader, doing 12 trades per year and targetting 5% return per trade. For this example we will use a gain percentage per period of 2%.

Then, we hit the "Calculate" button.

The results: "The Ending Balance" after compounding the gains of 6 consecutive winnings and the "Total Gain" percentage.

For this case, an initial equity of 1,000 units, of any account currency, after compounding the gains of 6 consecutive winnings, is now 1,126.16 units.

This means that by compounding just 6 winning trades and taking a low profit percentage of only 2% per trade, the account balance has grown by 12.6%.

On the results above there's a detailed breakdown of how each compounded trade increased the account balance, how much each compounded trade is in total percentage and the ending account balance.