Compounding math is seductive — and misleading
'Just 47 trades at 5%' ignores that losses reset the curve. Real growth is slower and lumpier. See how streaks derail it on the risk of ruin and streak simulator.
Working backwards from a target to what it actually requires
$10,000 in 12 months from a $1,000 account is 900% return — roughly 20.6% per month compounded. That's not impossible in a bull market but it requires not having a single bad month that erases progress. At 20% monthly, one −30% month sets you back two full months of gains.
The safer use of this calculator: size your realistic monthly target from your strategy's actual historical performance, not aspirations. If your backtest shows 5% average monthly return with 15% monthly volatility, plugging 5% in for 12 months gives you a realistic ceiling without the compounding fantasy.
Daily vs monthly compounding changes the number significantly over a year. 1% per day sounds like 365% but compounds to 3,678%. Almost nobody achieves 1%/day consistently for a year because drawdown months exist. What matters is the floor of your worst months, not the average of the good ones.
Related: ROI calculator, CAGR calculator, required win rate for target.