What Percentage of Day Traders Make Money? Key Statistics for 2024

Day trading is a highly volatile and competitive activity where traders buy and sell financial assets within the same trading day. The goal is to capitalize on market fluctuations for short-term profits. However, despite the allure of potential rewards, day trading comes with its risks, and the success rate is relatively low.

In this blog, we will break down the current state of day trading in 2024, including the success rate, reasons behind the low profitability, and insights into the careers of some of the most successful traders of all time.

Day Trading Statistics in 2024: The Hard Truth

High Risk, High Reward: The Reality of Day Trading

The allure of day trading lies in its potential for quick profits, but the statistics tell a different story. According to recent data:

• 80% of day traders quit within the first two years.
• 40% give up after just one month due to early losses.
• 1% of traders make a profit, with most of them achieving significant success only after many years of experience.

These figures highlight the intense challenges faced by new traders, who often start with high expectations but quickly realize that consistent profits are difficult to achieve.

The Role of AI in Trading

The use of AI in trading has been on the rise, with the market expected to reach a value of $50.4 billion by 2033. AI technologies such as machine learning and natural language processing are helping traders analyze large datasets, manage risk better, and optimize their portfolios.

In 2023, North America dominated this sector, with over 40.9% of the market share, thanks to its strong technological infrastructure and concentration of AI firms.

The Most Successful Traders of All Time

While the majority of day traders face losses, there are a few who have defied the odds and achieved legendary status in the trading world. Some of the most famous traders include:

• Jesse Livermore: Known for making $100 million during the stock market crash of 1929.
• George Soros: Famously earned $1 billion in a single day in 1992 by shorting the British pound.
• Steve Cohen: A hedge fund manager with a net worth of over $10 billion.

These traders succeeded by leveraging market trends, disciplined strategies, and an unwavering commitment to their craft.

Gender and Day Trading: Who Trades More?

Male vs. Female Traders

• 90% of day traders are male, while only 10% are female.

This gender disparity is partly due to the fact that men are generally more inclined to take financial risks, while women tend to be more conservative in their investment choices.

Day Trading Longevity and Quit Rates

Day trading is not for everyone. Here’s a quick look at how many traders quit within the first few years:

• First day: 100% of new traders are unprofitable.
• First month: 40% quit due to early losses.
• Two years: 80% of traders give up.
• Five years: Only 7% remain in the field.

The odds of success are slim, and many traders quit as they realize that consistent profit-making in day trading requires significant experience and knowledge.

Profit Margins for Day Traders

On average, traders make a few successful trades out of many. Here's a simple example:

• 71 trades are profitable, earning $21,600.
• 33 trades are losses, totaling $5,940.

The overall gross profit is $15,660, after accounting for commission fees.

However, the vast majority of traders do not make significant profits. It’s important to understand that day trading is a long-term endeavor and, for many, a continuous learning process.

Day Trading FAQs (Frequently Asked Questions)

1. How Long Do Most Day Traders Last?

Most day traders do not last long in the field. Approximately 80% quit within the first two years, and only 7% remain after five years.

2. What Is the Average Salary of a Day Trader?

In the USA, the average salary of a day trader ranges from $50,000 to $100,000 per year, depending on experience and success.

3. Is Day Trading Suitable for Beginners?

Day trading can be risky for beginners. It is advisable to start with a small investment and be prepared for the possibility of losses, especially in the first few months.

4. What Are the Odds of Making a Profit in Day Trading?

Day trading has a very low success rate. The odds of being profitable are estimated at 1%, with many traders experiencing losses in the beginning stages.

5. What is Swing Trading?

Swing trading involves holding stocks for a longer period, typically from a few days to weeks, to capitalize on price movements. It’s less stressful than day trading and requires a better understanding of market trends.