> Compound growth from your balance and per-period return — stated as arithmetic on an assumption, with the volatility drag no smooth projection shows. - Canonical: https://hadalinstruments.com/tools/forex-compounding-calculator/ --- Tool # Forex compounding calculator Compounding arithmetic is real and worth doing. What the usual version hides is that its input is an assumption — no account returns a fixed percentage per period — and that the smooth curve is not even the right average: returns that swing compound to **less** than the same mean delivered smoothly. This computes the projection, labels it as arithmetic on your assumption, and prices the swing — the row the curve never shows. Smooth projection — Smooth projection — arithmetic on your assumption — Total growth under it — With your stated swing — drag-adjusted — What the swing costs the smooth curve — ## This is arithmetic, not a forecast Every figure in the panel is a consequence of the numbers you typed, and of nothing else. The calculator has no opinion about whether your assumed return is achievable, because no page can have an honest one: a per-period return is a measurement that needs a sample, an account and a period, and an assumption typed into a form has none of the three. What the arithmetic *is* good for: seeing what a rule of thumb implies, pricing a target against a horizon, and noticing how violently the exponent treats small changes in the assumption — the difference between two nearby monthly figures, compounded over years, is routinely the difference between a result and a fantasy. ## Volatility drag — the row the curve hides A return that averages some figure with swings around it compounds to less than the same average delivered smoothly: up ten then down ten is not flat, it is minus one percent, and the loss compounds. The drag is approximately half the squared per-period swing, subtracted from the mean — small when the swing is small, and decisive when it is not. Ranking compounding calculators omit it entirely, which is how a volatile strategy and a smooth one with the same average project to the same balance on every other page while arriving at different ones in life. Supply a swing above and the panel prices the gap; the estimate is a second-order approximation and says so in the working line. ## What this does not do It does not project deposits or withdrawals — a schedule of contributions is bookkeeping this page would do badly and your broker's statement does exactly. It does not model the sequence of returns beyond the drag approximation: the order in which good and bad periods arrive changes the path and, against a drawdown rule, can end an account the average says should have survived — the [risk of ruin calculator](https://hadalinstruments.com/tools/risk-of-ruin-calculator/) treats that question properly, from a sample size. And it will not suggest a return. The blank field is the entire editorial position. The floor a projection has to live above is the [trailing drawdown calculator](https://hadalinstruments.com/tools/trailing-drawdown-calculator/); whether a run of losses ends the account before the average arrives is the [risk of ruin calculator](https://hadalinstruments.com/tools/risk-of-ruin-calculator/); and whether a backtest's average was ever real is what the [Overfit Auditor](https://hadalinstruments.com/instruments/overfit-auditor/) bounds. The full list is under [calculators](https://hadalinstruments.com/tools/). And when the inputs cannot support an answer, the panel above refuses and says why rather than rendering a zero — [why an instrument refuses to answer](https://hadalinstruments.com/docs/insufficient-n/) is that design, written down.