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Free tool

Trading Compounding Calculator

See how a gold trading account grows with a monthly return, deposits or withdrawals, month by month, and what a single −20% month does to the result.

Example values are hypothetical. Results update as you type and your last inputs are remembered on this device.

Final balance—
Trading gains
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Total deposits / withdrawals
—

What one −20% month does

Final balance if one month is −20%
—
Difference
—
Gain needed to undo −20%
+25.00%
Time to recover it
—

Account growth (gold line: steady returns; red dashed: one −20% month)

Month by month

MonthStartGainDeposit / withdrawalEnd

What the compounding calculator shows

Enter a starting balance, a monthly return, the number of months and any monthly deposit or withdrawal. The calculator builds the month-by-month table and chart of a trading account that compounds, and next to it an honest check: what the same plan looks like after one −20% month. Read it as arithmetic, not a promise. Consistent monthly returns are rare in real trading, and the order of good and bad months matters.

How to use it

  1. Enter your starting balance and a monthly return. Try a modest figure first, then a lower one.
  2. Add a monthly deposit as a positive number or a withdrawal as a negative number. Flows are applied at the end of each month.
  3. Choose where the bad month falls to see how a single −20% month changes the end result.
  4. Use the table to check any month. Change one input at a time to see what really drives the result.

The formula

  • Each month: end balance = start balance × (1 + monthly return) + deposit (or − withdrawal)
  • With no deposits: final balance = start × (1 + r)n
  • With a fixed monthly deposit D: final = start × (1 + r)n + D × ((1 + r)n − 1) ÷ r
  • Recovering a loss: after −20% you need +25% to get back, because 0.8 × 1.25 = 1

Worked examples

Example 1: the headline number and the bad month. $10,000 growing 5% every month for 12 months ends at $17,958.56 (10,000 × 1.0512). Swap one month for −20% and it ends at $13,682.71: one bad month costs $4,276, and at 5% a month it takes about 4.6 months just to make back the 25% needed.

Example 2: regular deposits. $10,000 at 3% a month for 24 months with $200 added each month ends at $27,213.24, of which $4,800 is your own deposits.

Example 3: living off the account. $5,000 at 2% a month with $100 withdrawn each month ends 36 months later at $5,000.00. At 2% the account earns exactly $100 in the first month, so the whole return is being taken out and the balance never grows.

Why steady monthly returns are rare

Real trading results come in uneven clumps. Most months are not the average month, losing months arrive in runs, and position size usually has to come down after a drawdown, which slows recovery. A method that makes good money in one year can lose in the next when gold's volatility or trend changes. That is why this page shows the −20% month next to the smooth curve. Use the drawdown recovery calculator to see how deep losses get, and the expectancy calculator to check whether a method has an edge at all.

Common mistakes

  • Treating a good month as the monthly return. Use your average over many months, including losing ones.
  • Raising risk to hit a compounding target. Higher risk per trade makes drawdowns deeper much faster than it makes gains bigger.
  • Ignoring withdrawals and costs. Spreads, commissions, swaps, taxes and money you take out all slow the curve.
  • Forgetting the order of returns. A loss early in the period, or right after you increase size, does more damage.

To keep each trade's risk fixed as the account grows or shrinks, size from the current balance with the position size calculator, and read the XAUUSD risk management lesson.

Before you plug a strategy into any calculator, check how it actually behaved on gold: our gold trading strategies, tested and gold indicator settings, tested hubs show real XAUUSD results with costs, including the losing streaks.

Frequently asked questions

How do you calculate compound growth on a trading account?

Multiply the balance by (1 + monthly return) each month and add or subtract any deposit or withdrawal. With no deposits, the final balance is start × (1 + r) to the power of the number of months: $10,000 at 5% for 12 months is about $17,959.

Is a 10% monthly return realistic in trading?

Holding any fixed return month after month is rare. Returns vary from month to month, losing months happen, and high returns usually come from high risk, which also brings deep drawdowns. Treat high figures in this calculator as arithmetic, not a target.

Why does a −20% month matter so much?

Because losses and gains are not symmetric. After −20% you need +25% to get back to where you were, and the lost month also stops compounding. One bad month can wipe out several good ones.

Are deposits added at the start or end of the month?

At the end of each month in this calculator, after that month’s return. Deposits made at the start would earn one extra month of return.

Should I compound my gold trading profits?

Compounding simply means sizing positions from the current balance, so risk per trade stays a fixed percentage as the account changes. It also shrinks positions after losses. Many traders prefer this to fixed lot sizes; it does not create an edge by itself.

Does this calculator include costs and taxes?

No. Enter your net monthly return after costs if you want a closer estimate, and remember taxes depend on where you live.

Keep learning

Educational tool only. Not financial advice and not a signal. Check your own broker's contract specification, margin rules and costs. Past data does not predict future prices. See our risk disclaimer.