97% of day traders lose money. How you can be the 3%?

By Volfik | Online News | 10 Apr 2022

  Help With Penny — 97% lose money trading, how to be better?

A Brazilian study, that examined day trading, from June 2020 found, that 97% of day traders lose money. What other data did it come up with and how can you be among the 3%?

What is considered day trading?

“Day trading is the activity of buying and selling the same financial asset on the same day in the same quantity.”

In a real example it means the following:

This study was based purely on day trading as explained above. Several studies have also previously evaluated the performance of traders, but these have included both people who are considered “day traders” and people who trade frequently in the same calculation

That’s why previous studies have come up with a result of around 20% — 20% of people who trade daily and regularly are in profit.

What was examined and how?

The study authors, Fernando Chague, Rodrigo De-Losso, and Bruno Giovannetti observed all day traders who started day trading between 2013 and 2015 for two years.

It is important to mention that only one asset was watched.

In total, they obtained data from just under 20,000 people, of which 1,551 were trading at least 300 days — these were our subjects.

Result of monitoring

“Only 17 individuals (1.1% of 1,551) earned more than the Brazilian minimum wage (US$ 16 per day), only eight individuals (0.5% of 1,551) earned more than the initial salary of a bank teller (US$ 54 per day), and the individual who earned the most earned US$ 310 per day on average.”

Thes also found no evidence that day traders improved their strategies over the course of 300 days.

How to be better at day trading and be among the 3%?

Personally, when someone asks me if they should start day trading I am usually against it. Precisely because of the fact that you can’t time the market. And usually when someone asks if they should start that’s why they shouldn’t start.

The fact that a person can’t decide whether to start or not means that he or she will make rushed decisions possibly afterward, during the actual day trading.

So how to be among the 3%?

Set your risk to reward ratio.

Be clear about how much you are willing to lose and whether the asset is worth the risk to reward ratio.

Emotions aside

When trading, don’t let your emotions get in the way. Don’t panic sell, do not be influenced by FOMO…

For more tips, see my article: 5 crucial principles of investing every investor need to know


Investing is scary, day trading even scarier. Definitely don’t make rash decisions — questions like “Should I quit my job and day trade for a living” are really not appropriate. Start slowly and maybe in time you’ll be confident enough to actually start day trading full time.

The study can be found here.


Originally published at https://helpwithpenny.com on March 30, 2022.

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Amateur blogger, founder of http://helpwithpenny.com/ , crypto enthusiastic, investor, and law student from the Czech Republic.

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