The two largest studies of individual day traders found that 97% of the Brazilians who kept at it for more than 300 days lost money, and that fewer than 1% of day traders in Taiwan earned reliable profits after fees, year after year. For most people who try it, then, no.
Those numbers come from very different markets and decades, which is part of why they’re hard to wave away.
The two studies everyone cites
The Brazil paper is “Day Trading for a Living?” by Fernando Chague, Rodrigo De-Losso and Bruno Giovannetti, first posted in 2019. The authors had data on every individual who started day trading Brazilian equity index mini-futures between 2013 and 2015. Among the people who stuck with it for more than 300 days, 97% lost money. Only about 1.1% earned more than Brazil’s minimum wage from it, and the authors found no sign that traders got better with practice. People who kept going mostly kept losing.
The Taiwan research is a series of papers by Brad Barber, Yi-Tsung Lee, Yu-Jane Liu and Terrance Odean. The best known, “The Cross-Section of Speculator Skill,” was published in the Journal of Financial Markets in 2014 and covers Taiwan’s stock market from 1992 to 2006. It concluded that less than 1% of the day trader population was able to predictably and reliably earn positive returns net of fees. A small group at the top did well, and their past results did predict future ones. That group was tiny.
U.S. regulators have said the same thing in plainer language for years. Investor.gov’s entry on day trading calls it “extremely risky” and says it “can result in substantial financial losses in a very short period of time.”
Where the money goes
Start with who’s on the other side. When you buy 500 shares of a stock for a two-minute trade, the seller is often a market maker or a trading firm running software that reacts in fractions of a second and sees the order book better than your app does. On a trade that lasts minutes, speed and information matter more than any opinion you have about the company.
Then there’s the spread. A zero-commission app still makes you pay it. With a stock quoted at $50.00 bid and $50.02 ask, buying 500 shares at the ask and selling them at the bid costs $10 for the round trip before the price moved at all. Do that 20 times a day and you’re $200 behind by the closing bell, which is $4,000 or so over a month of trading days. Every gain has to clear that bar first.
Taxes come next. Gains on positions held a year or less are short-term and get taxed at ordinary income rates, and hundreds of trades a year means wash sale tracking and a messy Form 8949. Some full-time traders look into trader tax status, which has its own tests in IRS Topic 429. Most people who trade on the side won’t meet them.
And there’s the person at the keyboard. Research on loss aversion finds people feel a loss about twice as strongly as an equal gain. In practice that shows up as holding a loser because selling makes the loss real, cutting a winner early to lock in the good feeling, and doubling up after a bad morning to get back to even.
What changed in June 2026
For more than two decades, FINRA’s pattern day trader rule required $25,000 in equity in a margin account if you made four or more day trades in five business days. That changed this year. The SEC approved FINRA’s amendment to Rule 4210 on April 14, 2026, and FINRA Regulatory Notice 26-10 set the effective date at June 4, 2026. The day-trade count and the $25,000 minimum were replaced by an intraday margin standard. Brokers that need to rebuild their systems have until October 20, 2027, so your account may still be on the old rules for a while. Ask your broker which regime applies to you.
Lower entry requirements mean more people can start with a few thousand dollars instead of $25,000 (FINRA’s floor for margin trading is now $2,000). Nothing about the new rule makes the trades more likely to work. The penalty is easy to skim past. If your account runs an intraday margin deficit, it has to be covered promptly, and customers who repeatedly fail to cover deficits by the fifth business day can be barred for 90 days from opening new short positions or new debit balances. So a small account can now day trade as often as it likes, and the broker’s margin desk becomes the thing that stops it.
Who does make it work?
In the Taiwan data, the small profitable group were heavy, experienced traders. They’re about who you’d expect. They treat it as a full-time job, trade a written plan with entry and exit rules and a daily loss limit, keep a journal of every trade, and expect returns closer to a good fund manager’s year than to a course ad. They also usually carry years of losses behind them. Consistency, when it shows up at all, tends to come after more than one bad drawdown, and the studies give no reason to think evenings and weekends get you there.
It’s also worth asking how the people selling trading courses make their living. If a strategy reliably printed money, selling it at $997 a seat would be a strange way to cash in.
If you still want to try
Paper trade first, for three to six months and at least 100 trades, with every one logged: entry, exit, reason, result. Most big brokers offer a simulator with fake money. A losing record on paper won’t improve once real losses are making the decisions harder.
If the paper record holds up, size your real trades so a bad streak doesn’t break you. On a $30,000 account, risk 1% per trade and ten straight losses leave about $27,100. That hurts, and you can keep going. Risk 10% per trade and the same ten losses leave about $10,460, and nobody trades well after losing two-thirds of the account in two weeks.
Write down a stopping rule before you start. Something like: “I’ll trade for 12 months. If I’m not profitable after costs over the last six of them, I stop and move the money to an index fund.” Deciding that in advance, on paper, is what keeps a losing year from turning into a losing decade.
And keep the comparison honest. A broad stock index fund gets you the market’s return, whatever it turns out to be, for a few minutes of setup and one tax form a year. Someone who spends three years learning to day trade and ends up flat would usually have been better off owning that fund the whole time. That’s the real cost of the experiment, beyond whatever the account loses.
Putting a small, fixed amount into trading as entertainment, the way some people budget for poker, is a choice adults get to make. The risk is that losses start to feel recoverable and the budget quietly grows.
Related reading
- What Your Day Trading App Costs You Per Year
- Can You Make $1,000 a Month Stock Trading? Running the Math
- Capital Gains Tax on Stocks in the U.S., Explained
The study results come from the papers linked above, and the margin rules are FINRA’s as of October 2026. Brokers can stay on the old pattern day trader setup until October 20, 2027, so ask yours which rules your account runs under before you fund it.
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