【Episode 10】Shōkinryū Start from 1,000,000 yen and 0.01 lot, and see how far compound interest can grow
“If I run Shoukinryu with 1,000,000 yen, how much will it be in five years?”
This is a question we often receive from those considering purchasing. Everyone cares about “how many times it will multiply by” within a certain period. This is natural.
However, the answer to this question should begin with the fact that it’s not about “how much profit you can take,” but“how you manage it will greatly change the outcome.”Even with the same EA,fixed lot operation vs compounded operation can yield more than double the account balance after five yearsin some cases.
This time, starting from 1,000,000 yen and 0.01 lot, we will simulate how far compounded trading could grow based on backtest results, and we will also touch on the pitfall of “compounding is dangerous.”
First, let’s examine compounding visually apart from formulas. Assuming an annual return of 20%, the graph below compares simple interest and compound interest growth.
Simple interest adds the same 200,000 yen every year as a straight line. In contrast, compound interest earns interest on the previous year’s profit, so growth accelerates over time. Even in five years, the endpoint isSimple 2,000,000 vs Compound ≈2,490,000and a difference of about 500,000 yen.
As the period extends to 10, 20 years, the difference becomes decisive. Einstein reportedly called this curve “humanity’s greatest invention,” likely because of the power of this curve.
To achieve compounding in FX, you must automatically scale the lot size as account balance increases. Manually adjusting the lot every month is not practical.
Shoukinryu includes this mechanism as standard.“Auto Lot feature”This is a logic that automatically calculates the entry lot according to the current account balance.
The mechanism is simple.“0.01 lot per 1,000,000 yen”If you set this as a baseline, when the balance becomes 2,000,000 yen it will be 0.02 lot, and at 5,000,000 yen it will be 0.05 lot automatically. No manual操作 is required.
This allows profits to cause the next trade’s lot to be larger, which in turn builds more profit with that larger lot, creating a snowball growth cycle.
Now, let’s look at actual numbers. We will整理 the backtest results that form the assumption.
- Period: 2015/01/01 − 2026/03/14 (about 11 years)
- Initial capital: 1,000,000 yen
- Fixed lot operation: 0.01 lot
- Net profit: 2,507,755 yen (final balance about 3,500,000 yen)
- Annual average: about 227,000 yen / about 22.7% (based on initial 1,000,000 yen)
Based on this result, the following is the progression assuming compounded operation at an annual rate of 20% (conservatively rounded).
| Year | Starting balance | Annual profit (20%) | Year-end balance | Operating lot |
|---|---|---|---|---|
| Year 1 | 1,000,000 | +200,000 | 1,200,000 | 0.01 → 0.012 |
| Year 2 | 1,200,000 | +240,000 | 1,440,000 | 0.012 → 0.014 |
| Year 3 | 1,440,000 | +288,000 | 1,728,000 | 0.014 → 0.017 |
| Year 4 | 1,728,000 | +346,000 | 2,074,000 | 0.017 → 0.020 |
| Year 5 | 2,074,000 | +415,000 | 2,489,000 | 0.020 → 0.024 |
| 5-year cumulative profit | +1,489,000 yen (about 2.5x) | |||
About 2.5x in 5 years. In theory, about 6.2x (nearly 6.2 million yen) after 10 years. This is the power of compound interest.
Note that an annual rate of 20% isa conservative estimate below the backtest averageA real market varies month to month; some years may rise 30%, others only 5%. This should be kept in mind when evaluating.
Up to now we’ve highlighted the魅力 of compounding, but compounding always comes with a set of “sides” that you should know.
If the lot doubles, unrealized losses for the same pips width also double. With a 2,000,000 yen balance and 0.02 lot, drawdown is twice that of the 0.01 lot scenario. Compounding magnifies both profits and losses—a double-edged sword.
Shoukinryu’s max DD is 12%. At 1,000,000 yen start that’s a 120,000 yen shock, but at 5,000,000 yen balance a 12% DD would be 600,000 yen. The same percentage carries greater psychological weight as the amount grows. Compounded trading requires mental discipline as well as capital management.
The moment you decide to withdraw half of the profits in year 3, the slope of the compound curve becomes much flatter. If you want to maximize compounding, you must commit not to withdraw during the operation. Conversely, if you prioritize liquidity, you must accept a portion of the compounding benefits being sacrificed.
My recommended compound operation designs are the following three patterns.
Raise the benchmark balance from 1,000,000 to 2,000,000 and ease the lot expansion. Designed to reduce the drawdown burden.
Recommended setting based on 1,000,000 yen: 0.01 lot. A standard operation that faithfully replicates backtest growth.
Lower the baseline balance to 500,000 yen and accelerate lot expansion. Returns are larger but DD almost doubles.
Compounded operation has a property: if you go too aggressive or too cautious, the effect weakens. If you are too aggressive, a single drawdown may wipe you out; if too cautious, the power of compounding becomes no different from simple interest. The target should be set according to your risk tolerance and market experience.
If you’re unsure, start with STANDARD (recommended setting) and operate for six months to a year to find your comfort level.
- Even with the same EA, fixed-lot vs compounded operation can lead to very different balances after several years
- Shoukinryu comes standard with an “Auto Lot” feature. Lot size automatically increases with balance
- At 20% annual rate with compounding, 1,000,000 yen may reach about 2,490,000 yen in 5 years and about 6,200,000 yen in 10 years
- However, compounding has three pitfalls: unrealized losses scale, drawdown burden increases, withdrawals can break compounding
- Starting with STANDARD setting (1,000,000 yen base, 0.01 lot) is the most practical option
※This article is for information provision purposes and not a solicitation for investment. The displayed results are past performance and do not guarantee future profits. FX/CFD trading involves risk. Please make investment decisions at your own responsibility.
