Day trading is the practice of buying and selling the same financial asset, in the same quantity, within a single trading day. The paper "Day trading for a living?" by Chague, De-Losso, and Giovannetti (2020) analyzed Comissão de Valores Mobiliários (CVM) records on 19,646 individuals. The individuals began day trading Brazilian mini-Ibovespa futures between 2013 and 2015, tracked through 2017. They found that 97% of the 1,551 individuals who persisted for more than 300 trading days lost money net of fees. Only 1.1% earned more than the Brazilian minimum wage, and only 0.5% earned more than a bank teller's initial salary. Both achievements came with great risk.
What the Study Found
97% of the 1,551 individuals who day traded mini-Ibovespa futures for more than 300 days lost money net of fees. Only 17 individuals, 1.1% of the 1,551 persistent traders, earned more than the Brazilian minimum wage of US$16 per day. Only 8 individuals, 0.5% of the 1,551 persistent traders, earned more than a bank teller's initial salary of US$54 per day. The single highest-earning day trader in the sample earned US$310 per day on average, with a standard deviation of US$2,560. Of the 19,646 individuals who began day trading between 2013 and 2015, 50.8% traded between 2 and 50 days. Only 7.9% of those individuals persisted beyond 300 days.
Methodology
The study uses individual-level day trading records from the Comissão de Valores Mobiliários (CVM), the Brazilian securities regulator, covering mini-Ibovespa futures contracts. The full sample includes 19,646 individuals who began day trading between 2013 and 2015, observed from 2012 through 2017. Learning effects were tested with individual-day panel regressions on 714,637 observations from the 1,551 traders who persisted beyond 300 days. All regressions include day trader fixed effects, with standard errors clustered at the investor level.
Key Statistics
| Metric | Finding | Context |
|---|---|---|
| Investors who lost money | 97% | Persistent traders (>300 days), net of fees |
| Earned more than minimum wage | 1.1% (17 of 1,551) | US$16/day benchmark |
| Earned more than bank teller salary | 0.5% (8 of 1,551) | US$54/day benchmark |
| Top earner's average daily profit | US$310 | Standard deviation of US$2,560 |
| Seq coefficient on daily net profit | -0.019* (SE 0.011) | Table 1, column 3, N=714,637 |
Why This Matters
Day trading courses that promise a livable income are not supported by the data for most participants. Profitability does not improve between the first and last third of an investor's trading days, indicating that experience alone does not yield skill. Day traders face competition from institutional high-frequency trading algorithms that were less common in earlier studies of trader performance. The extreme volatility behind the few profitable outcomes implies that any apparent success is difficult to distinguish from luck rather than skill.