Compounding Calculator

Compounding turns small monthly returns into life-changing accounts — over multi-year horizons. Most retail traders quit before compounding helps because they expect linear month-over-month gains. This calculator shows the realistic curve.

Compound formula: balance × (1 + monthly_return)^months
5% / month for 12 months = 79.6% annual
10% / month for 12 months = 213% annual
Most prop traders sustain 3-7% / month long-term, NOT the 30%+ marketed

Starting balance ($) Monthly return (%) Time horizon (months) Apply 30% drawdown stress test

Final balance (best case)—

Total return %—

After drawdown stress—

Annualized rate—

Monthly profit at month ${months}—

What's Realistic?

Don't trust YouTube traders showing 50% monthly returns. Public leaderboards of long-running live accounts average far lower than that over 1+ year track records. Prop firms enforce daily/max DD that caps the high-volatility strategies needed to chase 30%+ monthly.

Drawdown Compounding Trap

A -20% month requires +25% the next month to break even. -50% requires +100%. Drawdowns are exponentially harder to recover than gains. This calculator's stress test applies a one-month -30% setback and shows the recovery time.

Get the prop firm risk plan checklist

Six checks to run before and during a challenge, covering the daily loss cap, sizing from the stop, and the news and session rules that break most accounts. Sent to your inbox, free, no call required.

Educational material only, not financial advice. Trading involves risk. We do not share your details, and you can unsubscribe at any time.