Home › Guides › Beginner questions

What percentage of day traders make money? What the studies show, and why

Studies of real trading accounts find that only a small share of day traders come out ahead consistently after costs. The more useful part is why, because most of the reasons are habits you can plan around.

Beginner guide · 8-minute read · Updated 2026-10-21

The short answer

Research on real day trading accounts finds that a small minority earn money consistently after fees. In the most detailed study, of every day trader in Taiwan over many years, fewer than 1% earned reliably positive returns after costs, year after year.

That number is real, and it's also easy to misread. Here's what the studies looked at, and what they suggest helps.

The big study: Taiwan's day traders

Brad Barber, Yi-Tsung Lee, Yu-Jane Liu and Terrance Odean studied Taiwan's stock market, where the exchange keeps records of every trade by every investor. Their paper, The Cross-Section of Speculator Skill: Evidence from Day Trading, was published in the Journal of Financial Markets in 2014.

What they found, in plain words:

• Most day traders lost money after fees in a typical year.
• Fewer than 1% of all day traders were able to earn positive returns predictably and reliably, year after year, after fees.
• Traders who did well one year were more likely to do well the next. Skill showed up in a small group.
• The study covered 1992 to 2006. A related paper by the same team found many traders quit after losing.

Earlier versions of the same research used a shorter window and found that a larger share (under 20%) were ahead after costs over 6 months. That's a different measure. Over short spans, luck mixes in with skill.

Other evidence points the same way

• Barber and Odean (2000) studied US brokerage households in the 1990s. In their paper Trading Is Hazardous to Your Wealth, the households that traded the most earned less, after costs, than the market and less than those who traded the least.
• Broker disclosures in the UK and EU. Regulators there require brokers offering leveraged CFDs to publish what share of retail accounts lose money. Those numbers usually show that most accounts lose. Each broker posts its own figure.

None of this says it's impossible. It says it's hard, and that the average approach doesn't work well.

Why it happens

The studies point to a few causes again and again. Notice that most are about process, not intelligence.

1. Costs add up

Every trade pays a spread, and often a fee. Day traders trade a lot, so small costs become big. A plan that breaks even before costs loses after them. See how do brokers make money.

2. Too many trades

More trades mean more costs and more rushed decisions. The heaviest traders in the US data did worse than lighter ones. See how many trades a day a beginner should take.

3. Risk that's too big

One large loss can undo many small wins. Big size per trade, or no stop, makes a normal losing streak expensive. See how much to risk per trade.

4. Starting with real money too soon

Many people learn on live money, so the learning curve costs cash. Practice on past charts and paper costs nothing. See practice trading without money.

5. Small wins, big losses

Taking profits quickly and holding losers is a very human pattern. It makes a high win rate look good while the totals slip. See what is a good win rate.

What helps

These don't guarantee anything. They address the causes above:

1. Measure everything in units of risk. Know your average win, average loss and Expectancy. The expectancy calculator does the math.
2. Risk a small, fixed slice. Many traders use about 1% per trade, with a stop on every trade.
3. Cap your day. A daily loss limit, such as stopping after 2 losses. See daily loss limit.
4. Trade less. One clear setup, taken only when it shows up.
5. Count your costs. Put your real cost per trade into your plan.
6. Practice, then go small. 100 trades on past charts, then paper trading, then the smallest real size.
7. Keep a journal and review it. Patterns in your own trades are the most useful data you'll ever have. Our free trading journal template is a start.

What the numbers don't tell you

They don't tell you about any one person. They describe the average of everyone who tried, including people who traded with no plan, no stop and no practice.

They also can't tell you your own result. Nobody honestly can. Losses are always possible. What you can control is how you prepare, how much you risk and how you review.

Questions