Professional discretionary forex desks return 1-3% per month on average. At 3% monthly compounded, $10,000 becomes $14,257 in 12 months, $20,328 in 24 months. The doubling time is roughly 24 months at this rate. Returns above 10% per month are rarely sustainable.
Type the starting balance, type the realistic monthly return, type the time horizon. The calculator projects month-by-month growth and tells you the realistic path from where you are to where you want to be. The number that comes back is not motivational, it is mechanical, and that is the point.
Compounding Calculator
The compounding math nobody on social media shows
Compounding is the trader’s most asymmetric tool and the most misunderstood. Most retail traders see month one as the model and extrapolate linearly: 5% this month means 60% this year. The math actually works the other direction. At 5% per month compounded, the year-one return is 79.6%, but at 5% per month compounded over 5 years, the cumulative return is 1,824%. The early years look slow, the later years look exponential, and most retail traders quit somewhere in year two.
The institutional desks that survive understand the time variable better than the return variable. A 2% monthly return over 10 years (10.9x the starting balance) beats a 5% monthly return over 3 years (5.9x) every time. Patient traders with realistic return targets compound past aggressive traders with unsustainable targets, every single time.
What realistic return targets look like by trader type
Day traders running a tight 5-15 setups per week strategy targeting 1:2 R:R with a 50% win rate average 2-4% per month after costs. Swing traders running 1-2 setups per week with deeper conviction average 1-3% per month with much lower variance. Position traders running monthly or quarterly setups average 1-2% per month with single-trade variance much higher but portfolio variance lower.
Prop firm funded accounts are the outlier. Profit splits of 80-90% effectively mean the trader needs to compound 1-2% per month on the funded account to scale, with the prop firm absorbing the rest as overhead. Most traders fail prop challenges by chasing 10%+ months and over-leveraging. The boring 1-2% monthly compounder almost always scales past the variance hunter.
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Frequently asked questions
What is a realistic monthly return for forex traders?
Professional discretionary forex desks return 1-3% per month on average. Top systematic traders compound 3-5% per month over multi-year periods. Returns above 10% per month are almost always either unsustainable variance, leverage that has not yet been punished, or accounting fiction. The calculator defaults to 3% per month as a realistic professional baseline.
Does compounding work in practice?
Yes, but the timeline is longer than most traders expect. At 3% per month compounded, $10,000 becomes $14,257 in 12 months, $20,328 in 24 months, $40,968 in 48 months. The doubling time is roughly 24 months at this rate, which is faster than most asset classes but slower than the social-media version of trader returns.
Why does the calculator subtract withdrawals?
Most traders eventually withdraw to support living costs or take profit. Compounding mathematically assumes 100% reinvestment, withdrawals slow the curve. The calculator includes a monthly withdrawal input to show the realistic trajectory rather than the textbook one.
How do I model losing months?
Set a lower average return rate or model the variance separately. A trader averaging 3% per month with 30% monthly volatility might see -5% in one month and +8% in another, ending the quarter near average. The calculator uses a constant return for simplicity, expectation is to model the base case.
What is the largest input to long-term outcome?
Time, by a wide margin. Doubling the average monthly return from 2% to 4% roughly halves the time to a target. Doubling the time horizon from 5 years to 10 years grows the end balance by a factor of 4 to 6 times depending on the return rate. Most traders fixate on the return rate when the time horizon is the bigger lever.
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