Lesson T12.1 · 1 of 5 · Trader psychology and reality
How many day traders make money: what studies of real accounts show
Studies of real accounts show that most day traders lose money after costs, and very few make money year after year. In Taiwan, fewer than 1% profited consistently; in Brazil, 97% of those who kept going for more than 300 days lost money. Lasting profits exist, but they are the exception.
Terms in this lesson
- Day trading
- You buy and sell on the same day, to profit from small price moves.
- CFD
- A contract with your broker that pays or charges you the price move, without owning the asset.
- Trading commission
- What it costs you to buy, sell and hold shares at a broker.
The study of day traders in Taiwan
Brad Barber, Yi-Tsung Lee, Yu-Jane Liu and Terrance Odean had every trade on the Taiwan Stock Exchange over 15 years, from 1992 to 2006: 3.7 billion transactions. They defined a day trade as the same investor buying and selling the same stock on the same day. The study was published in the Journal of Financial Markets in 2014.
The costs include commission and Taiwan’s 0.3% tax on share sales. The second figure matters: a good year is not rare, one trader in five has one. But a good year says little about the next one. The consistent winners do exist; the authors show that the top 500 in one year’s ranking also made money the following year, on average, after costs.
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Create a free accountDay traders in Brazil: how many made a living
The study
Can you day trade for a living?
Of the 1,551 people who kept going for more than 300 days, 97% lost money.
Fernando Chague, Rodrigo De-Losso and Bruno Giovannetti used data from Brazil’s securities regulator (CVM) on everyone who started day trading Ibovespa mini-index futures in 2013-2015: 19,646 people. Only 1,551 (7.9%) carried on for more than 300 days. The results are after exchange and brokerage fees, before tax.
| Of the 1,551 | How many | Share |
|---|---|---|
| Lost money | about 1,500 | 97% |
| Earned more than Brazil’s minimum wage ($16 a day) | 17 | 1.1% |
| Earned more than a bank teller’s starting salary ($54 a day) | 8 | 0.5% |
| The best of them all | 1 | $310 a day, with very large swings from day to day |
The average result across the 1,551 was a loss of $48.81 a day. Amounts are in US dollars at the average exchange rate for the period, 2.91 reais to the dollar. The paper is a 2019 working paper. The threshold figures come from its main text; the abstract gives 0.4% for the bank-teller threshold, while the text says eight people, or 0.5%.
Barber and Odean (2000): what frequent trading costs
The Beginner lesson “Trading too often” used this study: the most active households earned 11.4% a year, against 17.9% for the market. One detail in the same paper explains where the gap comes from.
CFDs and forex: what ESMA, the AMF and the FCA found
Share of traders who lost money: 97% of Brazilian day traders who started in 2013-2015 and kept going for more than 300 days, 89% of forex and CFD clients in France in 2009-2012 (AMF), and 82% of CFD clients in the FCA’s 2016 sample. The studies measure in different ways.
- FCA (UK, 6 December 2016): in a representative sample of client accounts at CFD firms, 82% of clients lost money.
- ESMA (27 March 2018): national regulators’ analyses showed that 74-89% of retail accounts typically lose money on CFDs, with average losses per client of €1,600 to €29,000.
- AMF (France, 2014): 14,799 active clients trading forex, CFDs and binary options in 2009-2012. 13,224 of them lost around €175 million between them; the other 1,575 made €13.8 million between them. The average result was a loss of about €10,900 per client, and the median a loss of €1,843. Taken one year at a time, the average share of clients in loss was about 84%.
Since 2018 in the EU, and since 1 August 2019 in the UK, CFD providers have had to show a standard risk warning with the percentage of their retail accounts that lose money. You’ll find it on the provider’s website, and it’s updated regularly. The lesson on CFDs explains what leverage does.
Lessons are educational. They are not a recommendation to buy or sell. Investing involves risk and you can lose money. Sources: B. Barber, Y.-T. Lee, Y.-J. Liu, T. Odean, “The Cross-Section of Speculator Skill: Evidence from Day Trading”, Journal of Financial Markets 18 (2014), pp. 1-24; F. Chague, R. De-Losso, B. Giovannetti, “Day Trading for a Living?”, FEA-USP working paper 2019_47; B. Barber, T. Odean, “Trading Is Hazardous to Your Wealth”, The Journal of Finance 55(2), April 2000, pp. 773-806; AMF, “La lettre de l’Observatoire de l’épargne” no. 10, October 2014; ESMA press release on CFDs and binary options, 27 March 2018; FCA press releases on CFDs, 6 December 2016 and 1 July 2019. All accessed on 29 October 2026.