Day trading has become increasingly popular in recent years due to the accessibility of online trading platforms.
Day traders are often perceived – especially by themselves – as an investing elite, and if you watch day trading forums on social media, it’s easy to get the impression that they are making exceptional profits.
It can be profitable, but it’s also very risky, and it’s easy to lose money. If you’re considering it, you need to know what you’re getting into. These day trading statistics are a place to start.
- 64% of all US day traders lose money, and only 36% realize profits.
- Active day traders in the US underperform a value-weighted index by 10.3% annually.
- 90% of all active day traders are male.
- 66.3% of all day traders are white. The share of white day traders has been in decline in recent years.
- Relative to population size, Asian Americans have the highest number of day traders in the population.
- Bitcoin is the most preferred trading instrument, followed by Gold and the EUR/USD currency pair.
What Percentage of Day Traders Make Money?
The success rate of day traders is an elusive figure, but several studies and reports have attempted to quantify it.
One study examined the profitability of 324 US-based day traders. It established that 64% lost money and only 36% realized profits in the duration of the study.
A paper published in the Journal of Finance in April 2000 revealed that active day traders in the United States underperformed a value-weighted index by 10.3% annually..
How about in other countries?
A study examining the success rate of Taiwanese day traders found that only about 19% of all day traders made positive returns in 2011..
Three years later, a concept paper by the same researchers posited that on any given day, 97% of day traders lose money net of trading fees. Again, the conclusion was predicated on a study of the Taiwanese market.
Another study published in 2020 covering the Brazilian equity futures market established that only 1.1% of the surveyed day traders earned more than the country’s minimum wage net of fees. Also, only 0.5% made more than the initial salary of a bank teller.
Demographics of Day Traders
Let’s look at who’s engaged in day trading.
Day Traders by Gender
A 2007 Pew Research survey of the day trading landscape in the US found that 56% of active traders were male, against 44% of women.
Over 15 years later, the numbers shifted dramatically, and today 90% of all day traders are male, while only 10% are female..
Day Traders by Age
America’s day traders are young, with an average age of 31 years, according to Robinhood. However, this picture does not align with Zippia’s analysis, which found that an American day trader is at least 40 years old.
The disparity may exist because Robinhood surveyed its own clients, and it’s a platform that’s oriented toward younger users.
Day Traders by Race
A typical American day trader is white, Zippia data shows. According to the data, 66.3% of day traders in the US are white, 11.5% Hispanic or Latino, 12.4% Asian, and 5.5% Black or African American. The Native Americans make up just 0.2%.
Table 3: Day traders in the US by race
A BrokerNotes survey of the global online trading landscape (of which day trading is a subset) found that of the estimated 9.6 million online traders, 33% are Asian. North America and Europe account for around 16% apiece, and 14% are in Africa. The day trading landscape is not unique in terms of racial composition. Instead, it is just an extension of the broader online trading ecosystem.
Zooming out, the US data shows a declining share of white day traders. For example, Table 4 reveals that white day traders claimed a larger share of the population in 2020, at 73.73%, than in 2021, at 66.26%. Likewise, the number of Black or African American day traders is also lower than before, declining by close to one percent between 2010 and 2021. In contrast, more Asians and Hispanics/Latinos have joined the day trading space. According to Table 4, the number of Asian day traders in the US increased by over 4% between 2010 and 2021. Similarly, US Hispanic/Latino day traders increased from 10.24% in 2010 to 11.49% in 2021.
Table 4: Day trader race and ethnicity over time
Day Traders by Education Level
Most day traders are college educated. More than 95% of day traders in the US have attained an advanced level of education, with only 4% having only a high school diploma.
What Is the Most Preferred Trading Instrument?
Young traders prefer trading cryptocurrencies, according to a recent UK survey. The findings align with the latest ranking of the most active trading instruments worldwide. According to Investing.com, Bitcoin is the most preferred trading instrument, followed by Gold and the EUR/USD currency pair.
Average Daily Trading Volumes by Asset Class
Although day traders prefer cryptocurrencies like Bitcoin, they trade other instruments heavily, including stocks, forex, and bonds. Based on the daily trading volumes, stocks are the most traded, by day traders and other categories of traders, with a $239.8 billion average daily trading volume in 2021.
Table 8: Average Daily Trading Volumes of Different Asset Classes for Day Traders