It's just difficult to tell sometimes.
Hope the replies have been useful.Books on Compounding?
It works Peter, it just has a shorter cut off point unless you can take your business to somewhere like Pinnacle or the spread firms assuming they allow it of course. Given the utility function of money, I think compounding works for any "normal" trader who isn't trying to be Paul Tudor Jones
The point I was making Pete was that the £1m that you staked on Saturday would be far higher than what you did when you first started, so you compounded and then hit your ceiling. The same thing would apply in Forex if some IB or HF has so much money that they hit a ceiling problem there too. You told me a while back that you could make £1k from £1k within a week. So I would imagine if I gave you £50 then you would still make the £1k in a week but just not in week 1. So you are compounding ....for a while and then you hit "the wall"
+1
OP must remember that in order for compounding to work then certain criteria have to be in place. As was said, on an exchange like BF and especially BDQ then ceilings will be hit. So if you use Equity Curve Calculators for example which are useful at showing the compounding of edge, they don't show reality because they don't take scalability into account but they do highlight something useful if you juxtapose slightly, that of the great leverage afforded to you by an exchange ....its just that you can't keep on attaining exponential growth.
Also, you can negatively compound too (credit card debt for example) so the key before you even study this formula is to work on your knowledge base and build something with an edge because if you don't do that then compounding will magnify losses or the rate of loss.