Market Field Guide · LESSON 69 · 1 MIN
Compounding
The idea
Returns accrue on a changing capital base; losses compound too.
Try the scenario
100 grows 10% to110; another10% gives121 before costs.
Check your understanding
Which statement is supported by this definition?
- Returns accrue on the original capital forever.
- Returns accrue on a changing capital base; losses compound too.
- This concept guarantees the next five candles.
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