Claim audit · 2T

Do 95% of day traders really lose money?

Do 95% of day traders lose money? What the largest day trading studies actually measured, the real percentages, and why costs sit at the centre of the losses.

4 Oct 20266 min read

Verdict

The exact percentage usually has no source, but the biggest studies agree on the shape: the large majority of day traders lose money.

Two of the largest studies ever done found that only a few percent of day traders made money after costs, and far fewer made anything like a wage. The useful part isn't the headline number — it's why they lost, and that's the part you can do something about.

You've heard the number.

95% of day traders lose money. Or 90%. Or "90% lose 90% of their money in 90 days." It gets repeated so often it sounds like a law of physics.

But where does it come from?

Usually, nowhere you can check. The number gets passed from post to post with no study attached. So let's go to the studies that exist — the largest ones ever done — and see what they actually found.

You don't need to know anything about trading to follow this. A day trader is someone who buys and sells the same thing on the same day, trying to profit from price moves within that day.

The study that followed every new day trader in a country

In 2019, three economists — Fernando Chague, Rodrigo De-Losso and Bruno Giovannetti — published a working paper called Day trading for a living? They used data from Brazil's securities regulator covering every individual who day traded mini-Ibovespa futures for the first time between 2013 and 2015.

That's 19,646 people. Not a survey. Not a sample. Everyone.

(Futures are contracts to buy or sell something at a set price on a future date. The mini-Ibovespa contract follows Brazil's main stock index, and it was the most popular thing for day traders there.)

Here's what they found, split by how long people kept at it:

How long they day traded	People	Share who made money after costs
1 day	1,111	29.8%
2–50 days	9,978	15.5%
51–100 days	3,100	8.9%
101–200 days	2,738	6.8%
201–300 days	1,168	5.4%
More than 300 days	1,551	3.0%

Read the right-hand column from top to bottom. The longer people traded, the smaller the share who were ahead.

You'd expect the opposite. People who stick with something are usually the ones who are good at it. The researchers compared the pattern to roulette, where the share of winners also shrinks the more rounds are played.

"Lost money" isn't even the worst part

Of the 1,551 people who kept going for more than 300 days, 47 made money after costs. That's the famous 97% who lost.

But the researchers asked a better question: how much did the winners make?

17 people — 1.1% — earned more than Brazil's minimum wage (US$16 a day).
8 people — 0.5% — earned more than the starting salary of a bank teller (US$54 a day).
The single best trader averaged US$310 a day. And the eight top earners got there with huge daily swings: the standard deviation of their daily results (a measure of how far a typical day strays from the average) ranged from US$632 to US$3,308.

Out of all 19,646 who started, eight beat a bank teller's starting pay. That's roughly one person in 2,456.

The paper found no evidence that people got better with experience, either. For those who kept going past 300 days, the average daily result after costs was about −US$47 across their first 250 day trades, and about −US$52 after that.

The question most people ask is "will I lose?" The question that matters is "could this ever pay like a job?"

This is one market (Brazilian index futures) in one period. The note that matters: it's the most complete record of new day traders anywhere, and the next study points the same way.

The study with 15 years of every trade

The second big study comes from Taiwan. Brad Barber, Yi-Tsung Lee, Yu-Jane Liu, Terrance Odean and Ke Zhang used the complete trading records of the Taiwan Stock Exchange from 1992 to 2006 — every trade by every investor, for fifteen years.

Their findings:

The combined performance of all day traders was negative, and "the vast majority of day traders are unprofitable."
More than 75% of day traders quit within two years, and the ones losing money were more likely to quit.
A small group was predictably profitable — they made money year after year, not just once. On an average day, they were less than 3% of all day traders.

Their conclusion about trying day trading "to see if you're good at it" is blunt: it's "no more rational or profitable than playing roulette to learn."

The SEC's own guide to day trading reaches the same place. It says day traders "typically suffer severe financial losses in their first months of trading."

So is it 95%?

Not exactly — and that matters less than it seems.

The number depends on who you count and for how long. Everyone who tried for a single day? About 70% didn't come out ahead. People who kept at it for over a year? 97%. On an average day in Taiwan, fewer than 3 in 100 were reliably profitable.

Every serious study lands in the same place: most lose, and very few earn a living. The popular 95% is roughly in range. It just isn't from anywhere.

Why they lost — the part you can use

A headline number tells you the odds. It doesn't tell you why. The studies do.

Every result above is after costs — the fees, the spread (the gap between the price you can buy at and the price you can sell at) and the rest of what it takes to get in and out. Someone who trades every day pays those costs over and over. A cost that looks tiny on one trade becomes a steady drain across hundreds of them — and a method that only breaks even before costs loses money after them.

That's also why a high win rate — how often a trade makes money — doesn't rescue anyone on its own. The win-rate audit walks through exactly how a strategy that wins 80% of the time can still lose money.

None of the studies measured how prepared these people were: whether they knew their costs, tested a method before using real money, or sized their trades so one loss couldn't sink them. Those are skills. None of them require talent.

Most people lose because nobody taught them the boring parts. That's a solvable problem — and it starts with knowing exactly what each trade costs.

The free Module 3 walks through it from zero.

How to check this claim yourself

Ask for the source. A percentage with no study attached is a slogan, not a statistic.
Check who was counted. Everyone who tried once, or only people who kept going? The answer changes the number a lot.
Check whether it's after costs. Before-cost results can look very different from what landed in the account.
Look past "made money" to "how much." A tiny profit is technically a win. Ask whether it came close to a wage.
Check the market and years. One country and one period is evidence, not a universal law — so see whether other studies agree.

Sources

Where to go from here

If you're new, start with the basics that decide most outcomes: what trades really cost, how risk is sized, and how to test a claim yourself. Module 3 — What a trade actually costs is free, and so are Modules 1 and 2.

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Educational material only — not financial advice. Most people who day trade lose money.