Retail Day Trading is an Uphill Battle

Do retail day traders have a chance in current financial markets? They often lack proper trading research and infrastructure; they are facing high fees and stiff competition from professionals. But it’s always useful to view actual hard numbers and performance statistics and not just rely on feelings. Luckily, some academic research papers are exploring the question of the performance of retail traders. Chague, De-Losso, and Giovannetti have written the newest one, and as expected, their findings are not very favorable …

Authors: Chague, De-Losso, Giovannetti

Title: Day Trading for a Living?



We show that it is virtually impossible for an individual to day trade for a living, contrary to what course providers claim. We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and persisted for at least 300 days: 97% of them lost money, only 0.4% earned more than a bank teller (US$54 per day), and the top individual earned only US$310 per day with great risk (a standard deviation of US$2,560). Additionally, we find no evidence of learning by day trading.

Notable quotations from the academic research paper:

“Day trading is the activity of buying and selling the same nancial asset on the same day in the same quantity. According to a 2017 article in Forbes, day trading is the new sexy that gets an inordinate amount of hype. Using a dataset provided to us by the Brazilian SEC (Comissão de Valores Mobiliários), we follow all individuals who day traded mini-Ibovespa futures contracts for their first time from 2013 to 2015, a total of 19,646 individuals. Mini-Ibovespa futures are the preferred assets by day traders in Brazil, being the third most traded equity index futures and options contracts in the world – ahead of the E-mini S&P 500 Futures and S&P 500 Index Options, for example.

We compute the total net profit obtained by each one of the 19,646 new day traders. Considering those who day traded for only one day (1,111 individuals), 29.8% obtained positive net profit. Considering those who day traded for 2 to 50 days (9,978), 51 to 100 days (3,100), 101 to 200 days (2,738), 201 to 300 days (1,168), and more than 300 days (1,551), 15.5%, 8.9%, 6.8%, 5.4%, and 3.0% obtained positive net profit, respectively.

number of profitable daytraders
Algo Trading Promo Codes are available exclusively for Quantpedia’s readers.

Only 17 individuals (1.1% of 1,551) earned more than the Brazilian minimum wage (US$ 16 per day), only eight individuals (0.5% of 1,551) earned more than the initial salary of a bank teller (US$ 54 per day), and the individual who earned the most earned US$ 310 per day on average. Moreover, the eight individuals who earned more than the initial salary of a bank teller did so with great volatility; the standard deviation of their daily profit ranged from US$ 632 to US$ 3,308.”

performance statistic of day traders

Are you looking for more strategies to read about? Sign up for our newsletter or visit our Blog or Screener.

Do you want to learn more about Quantpedia Premium service? Check how Quantpedia works, our mission and Premium pricing offer.

Do you want to learn more about Quantpedia Pro service? Check its description, watch videos, review reporting capabilities and visit our pricing offer.

Or follow us on:

Facebook Group, Facebook Page, Twitter, Linkedin, Medium or Youtube

Share onRefer to a friend

Subscribe for Newsletter

Be first to know, when we publish new content

    The Encyclopedia of Quantitative Trading Strategies

    Log in

    - bi-weekly research insights -
    - tips on new trading strategies -
    - notifications about offers & promos -