Day Trading for a Living?
Read the paperopens papers.ssrn.com in a new tab
What they found
The authors tracked every individual who started day trading Brazilian equity index futures between 2013 and 2015 and followed them for up to several years. Of those who persisted for more than 300 trading days, 97% lost money, only about 1% earned more than the Brazilian minimum wage, and only a handful earned more than an entry-level bank teller's salary, with enormous day-to-day variance. Performance did not improve with experience: traders who kept going did not get better, they just kept losing.
What you can use
- Among people who day traded futures for more than a year, 97% lost money; the outcome was not 'break even', it was loss.
- There was no learning curve: results for traders with 300+ days of experience were no better than for beginners.
- The few profitable traders earned modest incomes with wild variance, not the lifestyle marketed by course sellers.
Caveats
Brazilian index futures with retail-oriented mini contracts; results might differ in other markets or instruments. Working paper (widely cited but not peer-reviewed in a top journal). Does not cover swing or position traders.
Tags: retail, day-trading, futures, brazil
Summaries are our own reading of the paper, not the authors' words. Educational only, not advice. Discuss it in Book Club.