I am so sick an d tired of this clap-trap talk about compounding, and charts showing how glorious it is. Nobody on this forum has ever told what compounding really is. You want to know what it is? It is putting everything you have into every trade, every time. Win lose or draw. You have 1K to trade, and you make 100. Whee. You now put 1100, your whole account into next trade. You make 100. Now you have 1200. You put the whole thing in. Maybe you make 100, maybe you lose 200. Eventually, if you follow the math, you will blow out. Because one day, while you are compounding you account, say it is at 10 million, and you go all in, the market does something you did not expect, and you are now down to zero, or even negative a few millions. Nobody here except me understands compounding, which is why they never tell you what the fuck is up. Well, that is what the fuck is up. Give up the dream of compounding, dudes! There is such a thing as reasonably scaling up your position size. That's a real thing! But the fantasy of compounding is just that. A fantasy, pushed by mathematical dicks who masturbate onto spreadsheets.
Sorry but that is not what compounding means at all. It just means incrementally increasing your risk per trade so as to increase your account PnL exponentially. Yes that could also mean doing it the way you mention above, but only a very silly person would do that. Typically it involves fractional increases in risk per trade, like risking 2% of your starting balance of say 10,000, 200. and also using 2% of your accrued balance of say 20,000, so 400.
I had never heard compounding described in this way. Do people actually trade this way? It sounds kamikaze.
I go with the standard 1-2% of account balance. I have a second trading account with higher risk parameters which is really paying well but DD can be a nightmare at times