Compounding Growth Reality Calculator

Compounding Growth Reality Calculator is built for traders who want realistic expectations, not fantasy equity curves. Instead of assuming a smooth “average return,” it models what actually happens when wins and losses arrive in random order while position size compounds.

Start with the four inputs. Risk % is the percentage of current equity you risk per trade. Because it’s applied to a changing account size, this is the lever that controls both growth and drawdown. Win rate is your probability of a win; R:R is how many “R” you make on winners (e.g., 2R means you gain twice what you risk). Together they determine expectancy:
E = p·RR − (1−p), measured in R per trade. A positive expectancy is necessary, but not sufficient—compounding punishes volatility.

Trades per week converts your edge into a monthly sample size. Two strategies with the same expectancy can produce very different monthly outcomes if one takes 5 trades and the other takes 40. Smaller sample sizes mean wider dispersion: more “surprise” months, both good and bad.

The outputs are designed for planning. Realistic monthly growth is taken from a simulated distribution of months, not a single expected value. This helps you set targets that survive randomness. Worst month projection (5th percentile) answers: “How bad can a month get even if my edge is real?” Use it to stress-test your budget, risk limits, and psychology.

The Monte Carlo chart runs 100 simulations across 200 trades to show path dependence. Many paths will diverge from the mean; that spread is the lived experience of trading. Expected drawdown summarizes typical peak-to-trough decline in those paths, helping you choose a risk % that you can actually tolerate.

Use this tool to pick a risk level that keeps worst-month pain survivable while letting your edge compound.