📉 Drawdown recovery — the honest math
Losses compound against you: a 20% hole needs a 25% gain just to break even. Enter your drawdown and see the road back at your normal risk — no martingale, no doubling.
How this calculator works — Forex Compounding Calculator
$1,000 × (1.02)⁵² = $2,803.32
The power isn't the 2% — it's the ᑊ. Ten weeks of +2% isn't +20%; it's +21.9%. Fifty-two weeks isn't +104%; it's +180%. And the reverse is why one −20% month needs a +25% recovery just to get back to flat.
Realistic vs fantasy (1 year, $1,000 start)
| Rate per week | End balance | Reality check |
|---|---|---|
| +0.5% | $1,296 | Excellent, sustainable year for a disciplined retail trader |
| +1% | $1,678 | Exceptional — top retail territory |
| +2% | $2,803 | Fund-beating; possible in a lucky year, not repeatable on demand |
| +5% | $12,086 | 🚩 If anyone promises this, they're selling something |
CFDs and Forex are complex instruments with a high risk of losing money rapidly due to leverage. Ensure you understand how these products work before trading. See our risk disclaimer New to sizing leverage? Read: the best leverage for beginners.
Frequently asked questions — Forex Compounding Calculator
What is compounding in forex trading?
Leaving profits in the account so percentage gains stack on bigger balances. It's the difference between linear growth (+$50/week forever) and geometric growth (+2%/week on everything).
Should I withdraw profits or compound them?
Both, by plan. Many traders compound to a target (e.g., 2× the account), then withdraw a fixed share monthly and compound the rest — this calculator models withdrawals by subtracting them each period if you extend the formula manually.
Does compounding change my position sizing?
Yes — and that's the point. If you size from a fixed % of current balance (our Position Size Calculator), your lot sizes grow with the account automatically. That IS compounding in practice.
What about compounding losses?
The same math runs in reverse and it's faster emotionally than technically: ten −2% weeks is −18.3%, not −20% — but recovering needs +22.4%. Risk-first sizing is the only defense.
Related tools & guides — Forex Compounding Calculator
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