Anyone from the Caribbean?

Just trying to see if anyone is from my region.

Actually, compound interest works only when you have fixed interest in per cent accrued on your account. For example, if you have a bank deposit with 2% effective interest rate, you will get these 2% on the lowest sum on your deposit during the year. This priniple is not directly applicable to Forex trading since there is no fixed income instruments or other way to get fixed interest in Forex. All profit you cen get depends exclusively on your efforts, so the actual income size expressed in per sent may vary from time to time.
At the same time, if we will speak about compound interest as about the way of growing your account in general, so yes, it will work, but just the same way as reinvested profit works in any other business. For example, if:

  • your trading skills and the strategy you use allow you to make 10% monthly, and if
  • you will not withdraw profit and
  • you will increase the position size to use the whole buying power available and
  • you will have no substantial drawdowns,

finally you will get something like compount interest. But, again, it would be more like profit reinvestment rather than compound interest itself.

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ok, thanks for your response. God bless.

its a nice detail with more information. thanks for the nice post.

In Forex; nothing!! You have to make new trade to earn or lose money!

Einstein is supposed to have called compound interest the eighth wonder of the world or the most powerful force in the universe.

Either way, increase your trade sizes (and maximum risk) in line with the growth of your account. If you can make 6% per month and do not withdraw any cash, you will double your account in 1 year.

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@tommor Thanks for this comment. It recasts some of my recent backtests in a new light.

Why way too many people think that this is just some sort of simple way to make money and that’s it. It’s not a guaranteed income that’s why there can’t be any thing like compound interest or even any possible interest anyway. See my point ?

Actually, the majority lose money so it is very optimistic to talk about compound interest. :slight_smile:

losing money in this stock market is a common deal , so any optimistic attitude always motivate us.

These types of trading stuff’s are valueless; so don’t try in your live unless making consistent result in demo! Be careful!