Compound Growth Calculator
See what consistent monthly returns become over time. Understand the power of compounding before setting your performance targets.
Assumes consistent monthly returns, which are not guaranteed in real trading. Use as a planning tool only.
Why compound growth matters more than big wins
Most traders focus on making large returns on individual trades. Professional traders focus on consistent small returns that compound. The mathematics of compounding means that 5% per month turns $10,000 into over $17,000 in 12 months — without ever needing a "big win".
The compound growth formula
This is the same formula used to calculate savings account interest, investment fund returns, and business revenue growth. For traders, it shows why protecting capital (avoiding large losses) matters as much as generating gains.
Realistic monthly return targets
- Conservative (1–3%): Achievable for systematic traders with low drawdown. $10,000 → $11,268 in 12 months at 2%/mo.
- Moderate (3–7%): Common for active traders with a consistent edge. $10,000 → $17,959 at 5%/mo.
- Aggressive (7%+): Requires exceptional execution and carries higher drawdown risk. Rare in practice.
The importance of not losing
Compounding works both ways. A 20% loss requires a 25% gain just to recover. A 50% loss requires a 100% gain to get back to breakeven. This is why professional traders prioritise capital preservation over return maximisation.