This is Why I Don’t Believe in Day Trading as a career
Reviewed of research — “Day Trading for a Living?”
Only 1.1% of traders earned more than the Brazilian minimum wage, around $16 per day
Over the years, I've come to believe that trading is mostly about waiting—waiting for the right moment and being highly selective. The more discriminating the system, the better. Success in trading isn’t found in chasing every opportunity but in letting only the highest-quality setups determine your actions. It’s a game of patience, where doing nothing is often the best move.
This mindset takes years to develop, and it’s something no study limited to a few months or even a couple of years can fully capture. That’s why, although the research I reviewed—“Day Trading for a Living?”—brings up valid points, I find it too short to provide a complete picture.
However, I admire the people who persisted for 300 days or more, even if the odds were against them. They were likely disciplined, consistent, and determined individuals. Trading every day for months, facing repeated losses and emotional stress, and still showing up is no small feat. Perhaps they didn’t achieve the profitability they aimed for, but they were far from quitters. It takes a rare type of person to engage with the market consistently, even when the returns seem elusive.
That said, the study offers a clear-eyed view of the harsh realities most day traders face. Below is a summary of its key findings.
Summary of "Day Trading for a Living?"
Study Overview:
The study focuses on individuals who began day trading between 2013 and 2015 in the Brazilian equity futures market, one of the largest in the world.
Data was collected from the Comissão de Valores Mobiliários (CVM), Brazil’s equivalent to the U.S. SEC. The research analyzed the performance of traders, particularly those trading mini-Ibovespa futures contracts.
Key Results:
97% of traders who persisted for more than 300 days lost money.
Only 1.1% of traders earned more than the Brazilian minimum wage (around $16 per day).
A mere 0.5% surpassed the income of a bank teller ($54 per day).
The top earner averaged $310 per day, but with extremely high volatility, showing a standard deviation of $2,560 per day.
Performance Decline Over Time:
The study found no evidence of learning or performance improvement over time, even among traders who persisted the longest.
The likelihood of earning a profit decreased the longer individuals kept trading, a pattern similar to gambling behaviors rather than skill-building activities.
Comparison with Previous Research:
Unlike earlier studies that suggested a small percentage of traders could achieve consistent profits, this study revealed that even the best performers faced substantial risks and earnings volatility.
One key factor highlighted was that today’s traders compete with institutional high-frequency trading algorithms, which makes profitability even more challenging.
Conclusions:
The study concludes that day trading is an unreliable and high-risk pursuit for most individuals. Despite the claims of course providers and brokers, the chances of earning a sustainable income are extremely low.
Those who persist are often misled by the hope of beating the odds, unaware that their efforts resemble gambling more than rational investing.
This research presents a sobering reality: day trading isn’t just difficult—it’s statistically doomed for most people. Even those who trade diligently for months or years are unlikely to see meaningful, consistent profits. While persistence and hard work are valuable traits, they aren’t enough to overcome the structural challenges and risks inherent to day trading. For those still considering it, this study should serve as a cautionary tale—highlighting the importance of realistic expectations and the severe limitations of pursuing day trading as a viable career.