What Percentage of Day Traders Are Profitable?

I trade futures for a living and I coach a small group of traders, so I'm not neutral on this question. I still think you should see the real numbers before you put money on the line, because most of the ones passed around online have no source at all.

Researchers have studied this properly a handful of times, using real account data from exchanges and brokers. Their answers look like they disagree, but each study counted something different. Once you see what each one measured, the picture is pretty clear.

The Short Answer in Numbers

So the honest answer depends on what you mean by profitable. About a third of day traders can end a good year in profit. Around one in five makes meaningful money in that year. And about one in a hundred keeps doing it, year after year, after costs.

Every Study on Day Trader Profitability

These are the studies built on real trading records rather than surveys or guesses. Each one is linked to its source in the notes below the table.

Sources: Jordan and Diltz, "The Profitability of Day Traders", Financial Analysts Journal 59(6), 2003. Barber, Lee, Liu and Odean, "The Cross-Section of Speculator Skill: Evidence from Day Trading", Journal of Financial Markets 18, 2014. Barber, Lee, Liu, Odean and Zhang, "Learning, Fast or Slow", Review of Asset Pricing Studies 10(1), 2020. Chague, De Losso and Giovannetti, "Day Trading for a Living?", SSRN, 2019 (revised 2020). ESMA, press release of 27 March 2018.

Why the Numbers Look So Different

At first glance 35.8% and less than 1% look like they can't both be true. They can, because each study asked a different question.

Making money once vs making it every year

The US study covered 21 months of the late 1990s, when tech stocks were booming, and the authors found that day trader profits rose and fell with the Nasdaq. A lot of traders look profitable in a market like that. The Taiwan study looked at 15 years and asked who could do it again the next year. That's where the number drops below 1%.

Making some money vs making a living

Ending the year a few hundred dollars up counts as profitable in most studies. The Brazilian researchers set a harder bar and asked how many earned more than the minimum wage. The answer was 1.1%.

Costs turn small winners into losers

In the US study the average trader made more than $8,000 before costs and lost about $750 after commissions. Day trading means a lot of round trips, and every one of them costs something. In futures that's commissions and exchange fees on every contract, plus slippage when a stop gets hit in a fast market. A strategy that wins by a little before costs often loses after them.

Losing traders keep going

You'd expect people who lose to stop, but most of them don't. In the Taiwan data, 74% of all day trading volume came from people with a history of losses, and among traders with 50 or more days of experience, 95.3% of the unprofitable ones were back day trading within a year. People keep trading without ever finding out whether what they do works.

Is It True That 95% of Traders Lose Money?

You'll see 90%, 95%, and the 90-90-90 rule (90% of traders lose 90% of their money in 90 days) everywhere. I couldn't find a study behind any of them. They're round numbers that get repeated until they sound like facts.

Over the long run the real research isn't far off. 97% of the Brazilian futures traders who stuck with it for more than 300 days lost money. But for a single year the share of traders in profit is higher than 5%, and quoting a made-up number when real ones exist doesn't help anyone decide.

What About Futures Day Traders?

The Brazilian study is the closest to what I trade. It followed people day trading the mini contract on Brazil's main stock index, which is a lot like trading micro futures on the S&P 500 or the Nasdaq. 97% of the ones who kept going lost money.

Futures don't change the odds much on their own. The market is centralized and costs per trade are low, which helps. Leverage cuts the other way, because it makes it very easy to lose a lot in one morning. Most of what decides whether you last is how much you risk per trade, which is why I start every new trader on risk management and the position size calculator before anything else.

Why Most Day Traders Fail

I've coached a lot of traders, and what I've noticed is that it's rarely a strategy problem. It's not that they're bad at technical analysis. It's that they're wired wrong for this.

From a young age in school you're taught that if you pass the exam you did well and if you fail you did badly, and the answers are always the same. The market doesn't work like that. It changes every day, and a lot of what happens is out of your control. A news release or someone else's big order can take out a perfectly good trade.

So most traders judge every trade by the result. A win feels like a good trade and a loss feels like a mistake, so after every loss they change something: the stop, the indicator, the timeframe. Fifty trades later they've traded five different strategies and have no idea whether any of them work. Look at a losing trade afterwards and you'll find a million reasons why you lost. The market gives you a million reasons why you won, too, and none of them have anything to do with your system.

That fits the Taiwan numbers above. Most of the volume came from people who kept trading after losing, and without a fixed set of rules you can't learn from that, because you never know what you were testing.

I made a short video about this:

What the Profitable Few Do Differently

The encouraging part of the Taiwan study is that the best traders kept winning. The 500 top-ranked day traders in one year went on to earn 37.9 basis points a day after fees the next year. Luck doesn't repeat like that, so skill is real, even if it's rare.

From what I see in the traders I work with, the ones who get there do a few things the averages above don't:

• They trade a written structure and judge each trade by whether they followed it, not by whether it made money. I go through how in trading discipline.
• They judge a strategy over a sample of trades instead of one day or one week. Forward testing explains how many trades that takes.
• They keep risk small enough to survive the learning curve, which takes longer than most people expect. See how long it takes to become profitable.
• They journal every trade and review it every week. A trading journal and a weekly review are how you find out what's actually costing you money.
• When something goes wrong they look at their own execution first, before blaming the market, the news or bad luck.

Should You Still Try Day Trading?

I do this for a living, so take my view with that in mind. I'd only start if the money you put in is money you can afford to lose, you're willing to spend months on a simulator and the smallest size, and you're ready to judge yourself on following a plan before you judge the P&L. The averages above are full of people who did none of that.

If you want the full picture before deciding, read is day trading worth it and how much day traders make. When you're ready to start, how to start day trading is the plan I give new traders.