Project your account growth through the power of compounding
(Days, Weeks, or Months)
Ending Balance
0.00
Total Net Profit
0.00
Total Increase
0%
Period
Starting
Profit
Ending
How Forex Compounding Works
In the world of currency trading, compounding is the process of generating earnings on an asset's reinvested earnings. Rather than withdrawing profits at the end of every trading session, a trader keeps the capital in the account to increase the size of future trades.
The Mathematical Formula
The standard formula used for calculating the future value of a compounded trading account is:
FV = P * (1 + r)^n
FV: Future Value (Final Balance)
P: Principal (Starting Capital)
r: Rate of return per period (as a decimal)
n: Number of periods (days, months, etc.)
Real-World Trading Example
Imagine you start a Forex account with 1,000 units of currency. You set a realistic goal of 2% profit per week. If you reinvest 100% of your profits, here is how your capital grows:
End of Month 1: 1,082.43 units
End of Month 6: 1,608.44 units
End of Year 1: 2,800.33 units
Note how the growth accelerates over time. This is why professional traders focus on consistency over "get rich quick" home runs. By maintaining a steady percentage gain, the actual dollar amount of those gains grows exponentially as your account size increases.
Importance of Reinvestment Rate
Our calculator includes a "Reinvestment Rate" field. Not all traders want to compound 100% of their gains. Some prefer to withdraw a portion for living expenses. If you set this to 50%, the calculator will compound half of your profit back into the account and assume the other half is withdrawn, allowing you to see how different withdrawal strategies affect your long-term growth.
function calculateForexCompounding() {
var startBal = parseFloat(document.getElementById('initial_balance').value);
var periods = parseInt(document.getElementById('periods').value);
var gainPer = parseFloat(document.getElementById('gain_percent').value) / 100;
var reinvestPer = parseFloat(document.getElementById('reinvest_rate').value) / 100;
if (isNaN(startBal) || isNaN(periods) || isNaN(gainPer) || isNaN(reinvestPer)) {
alert("Please enter valid numerical values.");
return;
}
var currentBal = startBal;
var tableBody = document.getElementById('table_body');
tableBody.innerHTML = "";
for (var i = 1; i <= periods; i++) {
var periodStart = currentBal;
var profitGenerated = periodStart * gainPer;
var amountToReinvest = profitGenerated * reinvestPer;
currentBal = periodStart + amountToReinvest;
// Only show first 50 rows to keep performance high, plus every 10th row if it's a long list
if (periods <= 50 || i <= 20 || i % Math.ceil(periods/20) === 0 || i === periods) {
var row = tableBody.insertRow();
row.innerHTML = "