Guide

Simple or compound returns: reading performance figures

A “since launch” performance of several thousand percent is surprising, and rightly so: you wonder how an account can earn more than a hundred times its stake, and whether the figure is honest. The answer lies in a rule of calculation, compound interest, which this guide explains with examples. It also shows why that figure does not carry over as it is to your own account.

Two ways of adding up gains

Take an account of €1,000 that gains 2% one month, then 3% the next.

As a simple return, you add the percentages: 2% + 3% = 5%. The account would be worth €1,050.
As compound interest, each gain applies to the account as it has become: €1,000 × 1.02 = €1,020, then €1,020 × 1.03 = €1,050.60. That is +5.06%.

The difference looks tiny over two months. It becomes huge over years, because each gain then works in turn. It is the same mechanism as a savings account whose interest itself earns interest, only much faster when monthly gains are high.

Why the cumulative figure quickly exceeds 100%

With gains of 5% a month compounded, an account doubles in a little over fourteen months, and is multiplied by 5.8 in three years: +480%, whereas simple addition would give 36 months × 5% = +180%.

Fictional example, at a constant 5% a month. A strategy's real gains vary from month to month and can be negative.
Period	Simple return	Compound interest
6 months	+30%	+34%
1 year	+60%	+80%
2 years	+120%	+222%
3 years	+180%	+480%
4 years	+240%	+940%

A cumulative return of several thousand percent is therefore not an anomaly: it is what several years of high monthly gains chained together produce. Above all it says one thing: the strategy has lasted. It does not say what it will earn next month.

What is the same in both directions: losses

Compounding amplifies losses too, and asymmetrically. An account that loses 50% must then gain 100% to get back to its starting point, not 50%. A 10% gain followed by a 10% loss leaves the account at 99% of its value, not 100%.

That is why the worst drawdown matters so much: a big fall is not “made up” by a rise of the same percentage. Our guide Floating drawdown gives the full table.

How to read a “since launch” performance

Three questions to ask in front of such a figure:

Since when? +3,000% in three years and +3,000% in six months do not describe the same risk.
Calculated how? Compounded on closed trades, or otherwise? On an account that receives deposits, a naive calculation (final balance ÷ initial balance) would mix deposits up with gains. The correct method, called time-weighted, measures each trade against the balance of the moment and chains the results, which neutralises deposits and withdrawals.
With what floating losses along the way? A cumulative figure on closed trades does not show open positions at a loss. It must be read together with the worst floating drawdown.

How to read a monthly or yearly result

A month's or a year's result is the same calculation, between the start and the end of the period. Two consequences:

Months do not add up. Twelve months at +5% make +80% over the year, not +60%. To get the yearly result, you multiply: 1.05 to the power of 12.
The same monthly percentage weighs more and more in euros as the account grows, in gains as in losses. +5% on €1,000 is €50; +5% on €10,000 is €500. The percentage is stable, the emotion is not.

And on your copying account?

A strategy's cumulative figure since launch does not describe what a copier will earn. Your result starts from your own start date and your own stake, with in addition:

the fee on profits, which reduces every positive month (see Fee and high-water mark);
withdrawals: every withdrawal takes out money that would have compounded afterwards. Withdrawing your gains regularly amounts to moving from a compound return to something close to a simple return, which is a legitimate choice, to be made knowingly;
stops and restarts of copying, which break the chain;
the execution differences described in Why your results differ.

And one essential point: compounding only works if the capital stays exposed continuously, including during drawdowns. It is precisely during those periods that the temptation to stop is strongest (see Why people stop copying at the worst time).

And at PlanetFinance?

The performance shown on the website, +3,553% since 11 November 2022, is compounded on closed trades, each measured against the account balance at the time it closed, net of broker fees and swaps, and before the copiers' 20% fee. The yearly results (2023: +322%, 2024: +99%, 2025: +88%) are the same measure over each year; they do not add up to the cumulative figure, they multiply. The Monthly reports page shows for each month the month's result, the cumulative figure since 1 January and the cumulative figure since launch, all compounded. The Method page explains all of this in detail.