Day Trading Facts & Statistics

Let’s look at some day trading facts and statistics.

We have article sources at the bottom, including where each numbered fact can be found in the parenthetical.

Day Trading Facts & Statistics

1. Only about 1-20% of day traders actually profit from their endeavors in some way.
2. Approximately 4% of day traders manage to make a living from day trading.
3. Around 40% of day traders exit the scene within a month, and only about 13% remain after three years (87% exit).
4. Day traders who hold positions for less than a day have a success rate of about 47%, while those holding for more than a year see a success rate of 73%.
5. Profitable day traders have a 96.4% probability to day trade again in the following 12 months, while unprofitable day traders are naturally lower.
6. The success rate for day trading as a source of income is around 4%, with only about 10-15% of traders making some money but not enough to sustain a career.
7. Following the above, 4% of day traders with adequate capital and who invest multiple hours daily manage to make a living from day trading.
8. Only around 5% to 20% of day traders consistently make money, with up to 95% losing money.
9. Day traders rarely hold positions overnight and aim to profit from intraday price moves and trends.
10. Over 85% of active day traders fail in their first year primarily due to poor risk management.
11. Day trading is a zero-sum game (negative-sum with transaction costs) where only a few traders prosper and make money.
12. The demographic tilt in day trading is towards the younger generation, with 65% of online traders in the UK falling in the 18-to-34-year age bracket.
13. The presence of traders above 45 years old has seen a decline, indicating a shift towards a younger, digital-savvy trading populace.
14. Approximately 9.5% of day traders are women, while 90.5% are men. This gender distribution in day trading reflects a predominantly male-dominated field, with a relatively low percentage of female participants.
15. The highest concentration of day traders is found in Asia, representing 33% of the total.
16. Around 16% of day traders are in the US, though precise figures for the US are unavailable.
17. Europe also accounts for 16% of the day trading population.
18. Africa is home to 14% of day traders.
19. The Middle East has a 10% share of day traders.
20. South America comprises 6% of the day trading community.
21. Central America hosts 3% of day traders.
22. The Oceania region has the smallest share, with only 2% of day traders based there.
23. It’s reported that 90% of day traders lose their initial investment within six months, with nearly 40% trading daily.
24. Day trading is approximately 15% of all financial services activity in the US.
25. Approximately 97% of day traders lose money, with most losing their capital within 90 days.
26. Around 80% of all day traders quit within the first two years, which highlights the challenges and attrition rate in day trading.
27. Day traders who are short on capital and use leverage have a high probability (70%) of losing all their capital.
28. While day trading is not inherently gambling, both activities involve quick decisions for potential profit or loss, and involve risk, uncertainty, and potential for addiction. While day trading involves analyzing market trends and making informed decisions, some traders may exhibit addictive behaviors similar to gambling. Studies suggest that some traders become addicted to the excitement and action derived from trading.

Takeaways

While some statistics on day trading are challenging to verify, the overarching set shows the inherent difficulties and high risks involved in day trading.

The data suggest that only about 1-20% of day traders consistently profit from their activities, and the attrition rate is high.

Given these statistics, the prudent approach for most individuals is to focus on their savings rate, diversify their portfolio, and avoid overly tactical or speculative trading decisions.

For the vast majority, a more balanced and long-term strategy is likely to yield the best results by providing more reliable returns over time.

Even successful active traders have separate portfolios and investments that are geared toward lower-risk, longer-term capital appreciation/preservation.

A longer-term strategy not only aligns with the principle of risk management but also supports the goal of achieving financial security and growth without exposing oneself to the competition and volatility of day trading.