Day Trading Statistics: What the Research Actually Shows

The short answer

Most day traders lose money, and a very small minority earn a steady income. The exact numbers depend on the market, the period and how a study defines a day trader, but research based on complete brokerage and exchange records keeps finding the same pattern. That kind of data matters. Screenshots and success stories online come from people who chose to share them; account records include everyone, including the traders who lost money and quietly stopped. There is also a simple piece of arithmetic behind the results. Over minutes or hours, prices move for reasons that have little to do with a company’s long-term value, so for every trader who profits from a short-term move there is usually someone on the other side who loses. Before costs, the game is close to zero-sum; after spreads, commissions and fees, it is negative-sum for traders as a group. Three of the most widely cited studies show the scale of the problem.

Brazil: 97% of persistent day traders lost money

In “Day Trading for a Living?”, first published in 2019, economists Fernando Chague, Rodrigo De-Losso and Bruno Giovannetti followed every individual who started day trading mini-index futures on Brazil’s stock exchange between 2013 and 2015 — 19,646 people. They then focused on the 1,551 who kept at it for more than 300 trading days, the group most likely to be treating it as a job. Of those, 97% lost money after fees. Only 1.1%, or 17 people, earned more than Brazil’s minimum wage from their trading, and just 0.5% earned more than a bank teller’s starting salary.

Taiwan: fewer than 1% reliably profitable

Taiwan has some of the most detailed trading records in the world, which is why researchers keep returning to it. In “The Cross-Section of Speculator Skill”, published in 2014, Brad Barber, Yi-Tsung Lee, Yu-Jane Liu and Terrance Odean studied years of day trading there. They found evidence that traders with strong past results tended to keep doing better than the rest — some skill exists — but also that fewer than 1% of all day traders could predictably and reliably earn positive abnormal returns after fees. An abnormal return means doing better than the risk you took would normally deliver, rather than simply riding a rising market.

The United States: trading more, earning less

An earlier study looked beyond day traders at ordinary investors who simply traded a lot. In “Trading Is Hazardous to Your Wealth”, published in 2000, Barber and Odean examined 66,465 households with accounts at a large US discount broker from 1991 to 1996. The average household turned over about 75% of its portfolio each year and earned 16.4% a year, against 17.9% for the market. The households that traded most did far worse, earning 11.4% a year. To see what that gap means, take a hypothetical $10,000: compounded for six years at 11.4% it grows to about $19,100, while at 17.9% it becomes about $26,900.

• Costs never take a day off: spreads, commissions and fees are paid on every trade, winning or losing, and they multiply with activity.
• The other side of the trade is often a professional firm with faster data, better execution and lower costs.
• Leverage, through futures, margin or CFDs, magnifies losses as well as gains, so a few bad days can wipe out months of small wins.
• Behaviour works against traders: overconfidence after wins, chasing losses, and closing winners too early.

What about CFDs and leveraged trading apps?

Much retail day trading in the UK and Europe happens through contracts for difference, or CFDs. These are leveraged derivatives: you are betting on a price move with borrowed exposure, not buying the underlying shares. Most retail accounts that trade CFDs lose money, and providers in the UK and the EU must show a standard risk warning stating the share of their own retail clients who lose money. That warning is calculated from the provider’s actual customers, which makes it one of the most honest numbers you will see on any trading app, and it is worth reading before you open a position.

What this means if you are tempted

None of this proves that nobody can succeed; the Taiwan study found a small group that did. It does mean the odds are poor, and that the people most visible online are not a fair sample. If you still want to try, treat it as an expense with a fixed budget you can afford to lose, keep it completely separate from your savings, and record every trade including fees. Then compare your results honestly with what a broad, low-cost index fund did over the same period. For building long-term wealth, the evidence points towards buying diversified funds and holding them for years. This article is general education, not personal financial advice.

This article is educational and general in nature. It isn’t personalized investment, tax, or legal advice — always weigh your own circumstances, or talk to a licensed professional, before making financial decisions.

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