The extra-ordinary power of compounding

Compounding, it seems, has got a bad rap, because it seems so slow.  What's 5% per year, after all?  However, as high frequency traders we can compound daily, and that gives us enormous opportunities to produce stunning results.

Last year (2004) I managed around 0.22% a day compounded, which doesn't sound much, but it was a respectable 71% for the year.   This year I'm far more focused on getting this figure up, even if it's by a fractional amount, as the long term effects are enormous.  My real target though, is the magical 1% per day.  A goal certainly worth striving for!  

Below is a screen-shot of a simple compound calculator I wrote in excel.  If any would like to play with it, it may be downloaded by clicking on the image. 

Alternatively, the excel file can be downloaded here.  (If you get a user/pw prompt; just hit 'Enter' a couple of times.  Please email me if that doesn't work).