An Introduction to the Forex Compounding Calculator

What Is a Forex Compounding Calculator?

Do you want to be a millionaire?

If your answer is yes, then you will need three things – a trading account, a starting balance of 1000$ and a forex compounding calculator.

Traders rely on a forex compounding calculator to analyze permutations and combinations of the amount invested, interest rate, and the number of months that would result in a higher account balance (major forex news websites offer compounding calculator).

So, the compounding calculator is an online tool to determine the favorable aspects of these parameters that will result in profitable investment.

How Does Compounding Work in Forex?

Let’s say the start balance is 1000$, and it accrues a certain percentage rate of interest that doubles the principal amount.

This principal amount plus the interest accrued if reinvested per month for a period of ten-months will fulfill your goal of being a millionaire.

So, the essence of compounding lies in reinvesting the total amount earned, month after month, that results in an exponential growth rate.

If your account has a chance to gain rapidly, it can fall considerably too. So, here’s a word of caution, consider a forex account only for the long term investment and be consistent. The United States of America brought the Dodd-Frank Act into effect to safeguard traders from heavy losses as a remedial step, post-economic crisis 2007-2008.

How to Use a Forex Compounding Calculator?

So here’s the drill, go to google, punch in “Forex compounding calculator,” and hit search. These interest calculators are available for free on various websites, you may try any website, and you are good to go. The compound interest calculator will have three to four input parameters for you to insert values. The values you need to insert are- start balance, the percentage per month/year, number of months/years. You shall see a detailed chart and a graph with all the critical figures like monthly compound interest, monthly gains, and final gain that will help you calculate the rate of return.

What Is the Importance of the Forex Compounding Calculator?

Forex traders use the calculators because not only do they display detailed analysis but also aid in forming a comprehensive view of the total account balance. Secondly, it makes number-crunching an easy job and provides the results on the go. This way, the trader can focus on calculating risks to develop a profitable portfolio. Lastly, it enables you to formulate various strategies so you can adopt the best strategy that ensures the highest returns.

Here Are Some Examples of the Forex Compounding Calculator

1. Forex Compounding Calculator – Use this calculator for basic use.
2. Forex Compounding Calculator – Circle Markets – To access other resources on this website, create your account with username and password.
3. Forex Compounding Calculator (Monthly or Yearly Gains) – This website has an additional parameter to check the yearly net gains.
4. Compounding Gains Calculator –  If you want an elaborate view in one glance, this one’s for you. Not only does it show the monthly and yearly gains but it also displays contributed value v/s earned value on the graph.

(On the above-mentioned products, all rights reserved with respective websites.)

Conclusion

So, these calculators will make compounding interesting for you effortless and present you with statistics that will allow you to make smart portfolios.