Must-Know Day Trading Statistics [Recent Analysis] • Gitnux (2024)

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Day trading is a popular form of investment that can be both rewarding and risky. It is important to understand the statistics behind day trading to make informed decisions. This article will provide an overview of the key day trading statistics, including the average return on investment, the success rate and the strategies for risk management in day trading.

It will also discuss the importance of understanding the statistics to make the most of your day trading investments. By the end of this article, you will have a better understanding of the day trading statistics and how they can be used to your advantage.

Day Trading: The Most Important Statistics

Nearly 40% of day traders quit within one month. After three years, only 13% of day traders remain.

90.5% of day Traders are male and 9.5% are female.

Robinhood reported that one of its users earned over $30 million in a single day of trading.

General day trading statistics and facts

Day trading has gained popularity recently, with participation significantly expanding in 2020 and 2021.

Only 13% of day traders were consistently profitable over a six-month period, per a University of California study.

According to a different survey, only 1% of day traders were able to consistently make money over a period of five years or more.

The New York Stock Exchange (NYSE) reports that 6.3 billion shares were traded on average per day in 2020.

The ordinary day trader does not make a sizable sum of money, despite the fact that certain day traders are profitable.

Traders sell winners at a 50% higher rate than losers. 60% of sales are winners, while 40% of sales are losers.

The average individual investor underperforms a market index by 1.5% per year. Active traders underperform by 6.5% annually.

The recent state of day trading

The growth of internet trading platforms and social media in recent years has contributed to the rise in the popularity of day trading. Also, as more people looked to profit from market volatility and work from home, the COVID-19 epidemic led to a large rise in retail trading activity.

Day trading, however, is a fiercely competitive and risky activity, and many traders suffer huge losses. In 2020, 72% of day traders experienced financial losses, according to a report by the Financial Industry Regulatory Authority (FINRA).

Despite the hazards and regulatory hurdles, day trading continues to draw a diverse variety of participants, from experienced professionals to beginner traders. American stock traders climbed from 15% in 2019 to 25% in 2021, according to a Charles Schwab survey, which is based on data from the country.

Day trading demographics

According to Broker Notes, 18-to-34-year-olds now account for 65% of all online traders in the UK, a figure that has increased year-on-year since 2015. At the same time, the proportion of traders over the age of 45 has dropped, marking a clear shift towards a younger demographic.

The percentage of women who identify as active traders has increased from 27% to 41%.

In the USA, 90.5% of day Traders are male and 9.5% female, according to Zippia.

A survey by E-Trade found that 53% of day traders have a household income of $100,000 or more.

What are the success rates in day trading?

According to Analysts Day Trade Review, the exact proportion at which day traders lose money varies by country and study period, but in most cases, more than 80% lose money within the first year of trading.

According to My Trading Skills nearly 40% of day traders quit within one month. After three years, only 13% of day traders remain.

Another survey showed that traders who held positions for less than a day had a success rate of 47%, while those who held positions for more than a year had a success rate of 73%.

In a study by the brokerage firm Tradeciety, traders who used a breakout trading strategy had a success rate of 30%, while those who used a trend-following strategy had a success rate of 20%.

Day trading profits

According to a study by the Financial Industry Regulatory Authority (FINRA), the median day trading profit among individual investors in 2020 was $13,000.

In 2020, another day trader reportedly earned over $100 million in profits from trading Tesla stock.

Traders who used a long-term trend following strategy had an average yearly profit of 16.8%, while those who used a momentum trading strategy had an average yearly profit of 12.5%.

In 2021, the day trading platform Robinhood reported that one of its users earned over $30 million in a single day of trading.

How beneficial can day trading be?

80% of day traders cited the ability to control trades as a top reason for why they enjoyed the activity.

Day trading can be accessible to traders with limited capital, as many brokers offer low minimum account balances and high leverage ratios.

In a survey by the brokerage firm Charles Schwab, 83% of day traders reported that the activity had helped them to become more disciplined and organized.

Day trading offers the potential for high returns, as traders can take advantage of short-term market movements to earn profits. A study showed that traders who held positions for less than a day had an average yearly profit of 14.4%.

Risk management in day trading

The 1% rule for day traders limits the risk on any given trade to no more than 1% of a trader’s total account value.

Day traders can risk 1% of their account by trading either large positions with tight stop-losses or small positions with stop-losses placed far away from the entry price. The profit target on these trades should be at least 1.5% or 2%.

A study showed that 88% of day traders use stop-loss orders as part of their risk management strategy.

According to a study by the trading platform Etoro, the average risk-to-reward ratio used by day traders is 1.43:1, indicating that traders are generally willing to take on slightly more risk than the potential reward.

TD Ameritrade’s brokerage firm found that 62% of day traders reported that they used position sizing as part of their risk management strategy.

Tips and strategies for successful day trading

According to a poll by the brokerage firm Charles Schwab, 70% of day traders reported that they had a trading plan in place.

45% of traders spend 1-2 hours each day trading, while only 14% spend more than 6 hours per day”.

In a survey by the trading platform Etoro, 89% of day traders use technical analysis as part of their trading strategy.

66% of traders say they make use of daily charts to view and analyze the market.

71% of day traders reported that they were always learning and seeking to improve their skills.

According to a report by the Financial Industry Regulatory Authority (FINRA), the use of stop-loss orders can help limit potential losses for day traders.

Supplementary Statistics

90% of day traders lose money consistently.

This serves as a warning to potential traders that the odds of success are heavily stacked against them. It is a reminder that day trading is not a get-rich-quick scheme, and that it requires a great deal of skill, knowledge, and discipline to be successful.

Only 1% of day traders are predicted to be profitable after costs.

It highlights the fact that the vast majority of day traders are likely to incur losses after costs, making it a risky endeavor. It is important to consider this statistic when considering day trading as an investment strategy.

Approximately 72% of day traders suffered a net loss in 2019.

The majority of day traders are not able to turn a profit, and that the potential for losses is very real. It serves as a warning to those considering day trading, and should be taken into account when making decisions about whether or not to pursue this type of investment.

The average individual day trader loses money for six months before giving up.

It takes a significant amount of time and dedication to become successful in the field, and that it is not a get-rich-quick scheme. It also serves as a warning to those who are considering day trading, that it is not a guaranteed path to success and that it requires a great deal of effort and patience.

97% of individual day traders consistently lose money.

This serves as a warning to potential traders that the odds are stacked against them and that they should approach day trading with caution. It also highlights the importance of having a sound trading strategy and understanding the markets before attempting to make a profit.

40% of day traders quit within a month, and 87% quit within 3 years.

Most day traders are unable to sustain their trading activity over the long term, with a high percentage quitting within a short period of time. This is an important statistic to consider when evaluating the potential of day trading as an investment strategy.

Female day traders are more successful than male day traders, with an average return of 43% compared to 41%.

Women can be just as successful as men in the world of day trading, and that they should not be overlooked or underestimated. This statistic serves as a reminder that gender should not be a barrier to success in the financial markets.

Day trading penny stocks has a success rate of about 1%.

Despite the potential for high returns, the chances of success are slim. As such, it is important for potential day traders to be aware of the risks and to approach the activity with caution.

Approximately 17% of day traders can manage to earn minimum wage via day trading.

Thus, the majority of day traders are unable to make a living wage from their trading activities, highlighting the need for caution and careful consideration when entering the world of day trading.

The average loss for 450 day trading clients at a brokerage firm in 2015 was €10,900.

Despite the potential for high returns, day trading can also lead to significant losses. This statistic is a cautionary tale for those considering day trading, and serves as a reminder that it is important to be aware of the potential risks before investing.

Day traders are more likely to experience a 50% loss than a 50% gain.

While there is potential for large gains, there is also a significant chance of significant losses. This is an important point to consider for anyone considering day trading as an investment strategy.

Only 3% of day traders make consistent profits.

Day trading is a risky endeavor, with only a small fraction of traders able to make consistent profits. It highlights the importance of doing thorough research and having a sound trading strategy before entering the market.

Day traders who use margin for leverage suffer an average return of -4.53%.

Leveraging margin can amplify gains, but it can also amplify losses. The average return of -4.53% indicates that day traders who use margin for leverage are more likely to experience losses than gains.

Therefore, day trading is not a guaranteed path to success, and that traders should be aware of the potential for losses. It is an important statistic to consider when evaluating the potential of day trading as an investment strategy.

Over 85% of active day traders fail in their first year due to poor risk management.

Even with the best intentions and strategies, traders can still fail if they do not properly manage their risk. This statistic serves as a warning to those considering day trading, that they must be aware of the risks and take the necessary steps to mitigate them.

Conclusion

Day trading is an exciting and potentially lucrative way to make money in the stock market. While the potential rewards are great, the risks should not be taken lightly.

The statistics indicate that the majority of day traders are unsuccessful, and even those who are successful make only modest returns. It’s important to understand the risks and rewards of day trading before making any decisions, and to be realistic about the potential returns. With the right knowledge and strategy, day trading can be a great way to make money.

References

Zippia: “Day trader demographics and statistics in the US”, cited February 2023. (Source)

WorldFinance: “The changing face of trading”, cited February 2023. (Source)

MyTradingSkills: “15 Mind Opening Day Trading Statistics”, cited February 2023. (Source)

DayTradeReview: “Day Trading Statistics-10 Interesting Facts”, cited February 2023. (Source)

DayTradeTheWorld: “Risk management strategies working in 2022 in day trading”, cited February 2023. (Source)

TheBalance: “Why Day Traders Should Stick to the 1% Risk Rule”, cited February 2023. (Source)

Tradeciety: “Scientists discovered why most traders lose money – 24 surprising statistics”, cited February 2023. (Source)

Chron: “How Much Does a Day Trader Make?”, cited February 2023. (Source)

University of California: “Do Individual Day Traders Make Money? Evidence from Taiwan”, cited February 2023. (Source)

NYSE: “Trading and Data”, cited February 2023. (Source)

Charles Schwab: “An Introduction to Pattern Day Trader Rules”, cited February 2023. (Source)

FINRA: “Day Trading Risk Disclosure Statement”, cited February 2023. (Source)

Etoro: “Top CFD strategies every trader needs to know”, cited February 2023. (Source)

FAQs

What is day trading?

Day trading is the practice of buying and selling financial instruments (such as stocks, options, and futures contracts) within the same trading day.

What are the risks involved in day trading?

Day trading can involve high risk and potential losses, as well as potential rewards. It is important to understand the risks associated with day trading before getting started.

What are the benefits of day trading?

Day trading can provide the potential for higher returns than traditional investing, as well as the ability to take advantage of short-term price movements.

What type of account do I need to day trade?

To day trade, you need to open a margin account with a broker that allows day trading.

How much money do I need to start day trading?

The amount of money you need to start day trading depends on the type of account you open and the type of securities you plan to trade. Generally, you should have at least $2,000 to $3,000 in capital to begin day trading.

How we write our statistic reports:

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly.

See our Editorial Process.

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Must-Know Day Trading Statistics [Recent Analysis] • Gitnux (2024)

FAQs

Must-Know Day Trading Statistics [Recent Analysis] • Gitnux? ›

Day traders are more likely to experience a 50% loss than a 50% gain. While there is potential for large gains, there is also a significant chance of significant losses. This is an important point to consider for anyone considering day trading as an investment strategy. Only 3% of day traders make consistent profits.

How much money do day traders with $10000 accounts make per day on average? ›

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

What is a good profit percentage for day trading? ›

Profit Margins

Some traders aim to earn 1%-2.5% of their account balance daily. It should be noted that higher risks usually accompany higher returns and that traders who risk more have a higher potential to blow out their trading accounts. Many profitable traders attest to the importance of proper risk management.

What are the realistic returns from day trading? ›

Be Realistic About Profits

Traders can be successful by only profiting from 50% to 60% of their trades. However, they need to profit more on their winners than they lose on their losers.

Who are the most successful day traders? ›

The greatest three traders in the history of trading are George Soros, Michel Burry, and David Tepper. Let us take a very brief look at each of them.

Can I make $100 a day day trading? ›

You're really probably going to need closer to 4,000 or $5,000 in order to make that $100 a day consistently. And ultimately it's going to be a couple of trades a week where you total $500 a week, so it's going to take a little bit more work.

Can you make $200 a day day trading? ›

A common approach for new day traders is to start with a goal of $200 per day and work up to $800-$1000 over time. Small winners are better than home runs because it forces you to stay on your plan and use discipline. Sure, you'll hit a big winner every now and then, but consistency is the real key to day trading.

What is the 1% rule for day trading? ›

The 1% risk rule means not risking more than 1% of account capital on a single trade. It doesn't mean only putting 1% of your capital into a trade. Put as much capital as you wish, but if the trade is losing more than 1% of your total capital, close the position.

How much do average day traders make? ›

Day Trader Salary
Annual SalaryMonthly Pay
Top Earners$185,000$15,416
75th Percentile$105,500$8,791
Average$96,774$8,064
25th Percentile$56,500$4,708

Can you live off day trading? ›

In summary, if you want to make a living from day trading, your odds are probably around 4% with adequate capital and investing multiple hours every day honing your method over six months or more (once you have a method to even work on).

How long should a day trader stay in a trade? ›

Day traders typically target stocks, options, futures, commodities, or currencies (including crypto). They enter and exit positions within the same day (hence the term day traders). They hold positions for hours, minutes, or even seconds before selling them. They rarely hold positions overnight.

What is the best timeframe for day trader? ›

Day traders mostly use several timeframes, including 15-minute, 30-minute, and hourly charts. The four-hour chart is not common among day traders. Instead, it is popular among swing traders. The benefit of using the 15-minute chart in day trading is that it shows a longer-term view of the price movement.

Is anyone actually successful at day trading? ›

Day trading is a strategy in which investors buy and sell stocks the same day. It is rarely successful, with an estimated 95% loss percentage. Even if you do see a gain, it must be enough to offset fees and taxes, as well.

Who is the most profitable trader of all time? ›

There are several people who managed to reach a high level of consistency in their trading and became one of the greatest stock traders in the world. These traders are Jesse Livermore, Paul Tudor Jones, Simon ca*wkwel, Warren Buffett, and Steven Cohen. They are considered to be the richest stock traders of all time.

Who made millions in day trading? ›

Legend has it Takashi Kotegawa started with the equivalent of $13,600. He benefited from some luck and a lot of skill to rack up $153 million in about eight years. Sometimes he made millions per trade. While primarily a stock trader, Takashi has been known to trade in a variety of financial instruments.

Who is the number one day trader in the world? ›

1. George Soros. George Soros, often referred to as the «Man Who Broke the Bank of England», is an iconic figure in the world of forex trading.

How much money do day traders make on average? ›

The average income of a day trader varies widely, depending on factors like experience, strategy, and market conditions. While some traders can make over $100,000 per year, many others struggle to break even.

How much do day traders trade per day? ›

A day trader might make 100 to a few hundred trades in a day, depending on the strategy and how frequently attractive opportunities appear. With so many trades, it's important that day traders keep costs low — our online broker comparison tool can help narrow the options.

Can I make 1000 per day from trading? ›

Earning Rs. 1000 per day in the share market requires knowledge, discipline, and a well-defined strategy. Whether you choose day trading, swing trading, fundamental analysis, or any other approach, remember that success takes time and effort. The share market can be highly rewarding but carries inherent risks.

Can you make 100k a year day trading? ›

The best day traders can make six figures or more per year. Can You Make 100k a Year Day Trading? For a day trader to make 100k a year trading, they need to make $397 per day since there are 252 trading days. Most day traders are not profitable, though.

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