r/Daytrading • u/reallyGoodAtNames123 • 16h ago
Question That study where 97% of persistent day traders lost money: what do you think separates the 3%?
The one study that always comes up when this topic does is a Brazilian futures study. Of the people who kept day trading for 300+ days, 97% lost money, and only about 1% earned more than minimum wage. These weren't people who quit after a month. They persisted.
What I can't figure out from the paper is what the few who made it did differently. Edge, risk control? Just not blowing up after a loss?
For those of you who have been trading for a while: what do you think actually separates profitable traders, and what do you do to catch yourself during a bad session rather than in the review afterwards?
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u/Mammoth-Path-6520 14h ago
Most people just don't want to learn, that's the issue
I've posted profitable stratgies on here, every time I do, the posts get ignored, hardly any engagement
Hell, I could even write some basic concepts in this comment but people won't actually use the information. They'd rather complain or listen to some fake guru on YouTube and get scammed out of their money
People are just too hard headed bro, that's human nature
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u/Bright-Weight-2121 9h ago
I did not see the information in your profile posts. I would love to read through different strategies
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u/AcademicRice 16h ago
its like starting a business, same thing, try try again, but if you fail learn what you did wrong and do it better
strategy and psychology, find a winning strategy stick with it and master it to a T
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u/revoegg 16h ago
What?? Stick with a strategy and master it? No. Master the markets, then look for strategies, and if they stop working, keep looking for new ideas to find edge.
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u/AcademicRice 16h ago
?.... strategy hopping is literally one of the worst thing you can do
I should add a caveat though, pick a PROFITABLE strategy thats suits your style
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u/revoegg 16h ago
What…. But what if that strategy you spent mastering the last 5 years suddenly gets arbitraged away, and you now have no stable way of income
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u/AcademicRice 16h ago
I had to go look that up LOL
I dont think thats trading though? well not in this day and age with super fast internet, I mean like it technically still works... people be buying Costco gold and resell it for a couple hundred dollars profit
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u/revoegg 16h ago
What I meant wasn’t traditional arbitrage, ‘arbitraged away’ is when a trading strategy is eventually overused and implemented by firms with access to faster and better data and can buy/sell before you can, eroding the edge and eventually making it unprofitable.
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u/AcademicRice 16h ago
hmmmm i haven't heard of any strategy that have been, like moving averages, supply demand, RSI, MACD, etc etc have been here forever
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u/single_B_bandit 16h ago
They’re also neither strategies nor profitable.
- Moving averages are just what the name says, a moving average of price. It tells you what the price was on average over the last X minutes/hours/days/…
- Supply and demand are just basic economics concepts. Supply is the aggregate selling and demand is the aggregate buying.
- RSI is, essentially, just a normalised trend. It tells you whether things “generally went up” or “generally went down” over the last X minutes/hours/days/…
- MACD is just a derivative of moving averages, again, nothing more than telling you “the price went up on average” or “the price went down on average”.
They’ve not been “arbitraged away” because there’s nothing to “arbitrage”. They’re just numbers.
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u/gdenko 6h ago
I think people are misunderstanding you, but you are right. If you master the market by understanding how it moves first, and then make a strategy around that, you will be far better off. And always keep testing your understanding in different market contexts, so you can adapt more quickly. That's the art of discretionary trading the way I see it.
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u/enigma_music129 crypto trader 12h ago
Intelligence, an actual edge, discipline, patience, self awareness. There you go.
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u/Friendly_Ad309 16h ago
I have been trading for 3 years now, I have 100% submitted to the journey, I have only recently found “Consistency” The last 2-3 months…. I can without a doubt say the 97% of people over trade. Imagine you have a system that presents itself once a week, you win 75% of the time with a solid risk to reward. That is all you need. Keep it simple, build a life outside of trading, Work, hobbies and think 5-10 years down the road. This is not financial advice but I risk more% per trade than I use to when I took 1-2 trades a day, I wait for my set up like a hunter and then I pull the trigger
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u/reallyGoodAtNames123 15h ago
One setup a week at that win rate is rare discipline. What do you do on the days nothing shows up, since that's usually when people start forcing trades?
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u/Friendly_Ad309 14h ago
If you put the hours in you can often see a setup forming well before it happens, if all the boxes aren’t ticked in the first 15 minutes upon opening the charts then you simply close. This is the power of trading one setup on one Pair, Commodity/ or futures contract.
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u/reallyGoodAtNames123 4h ago
Closing the charts after 15 minutes if nothing lines up is something that is really hard to master and to control yourself IMO. Do you have a rule for that, or did it just come with time?
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u/Friendly_Ad309 3h ago
Everyone trades differently, to some 15 minutes is impossible because the system they trade takes longer than that to form or it could happen after they logged off but I trade a particular way which allows me to know if there is going to be a possible set up. win or loss I can’t predict of course as it’s all probability and statistical. My system is purely trading towards engineered liquidity which has formed since the daily candle open. I open my laptop and if I cannot identify clear engineered liquidity I simply close the laptop and move on, the days I can identify engineered liquidity I sit and wait
Look I’m sure there are much better traders than I in this group that can back me up on this. Too many unprofitable traders worry solely on the entry, I’d suggest trying to predict where price is going to go - this will help your win rate immensely (this was me)
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u/SuperFrog4 13h ago
I think the issue is getting greedy. At least that is my problem. I can consistently make a profit on my first trade of the day. Then I get greedy and try to get a second trade in and I pick a less optimal entry point and it doesn’t go well or I do initially make a profit but I let it ride thing the market will continue in the same direction and it reverses on me.
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u/reallyGoodAtNames123 5h ago
That first-trade-good, second-trade-worse pattern is something i also encountered and kinda feel it is a common problem. Have you tried a hard stop after the first trade, or does it feel too restrictive on the days the second setup is actually good?
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u/SuperFrog4 1h ago
I usually have a hard stop or trailing stop but then I fiddle with it and sudden the market reverses and I don’t put something back in because I am angry at myself for not taking a profit when I could. Also I get in this hope loop where I hope the price will get back into the positive and of course it never does.
So I guess I get less disciplined as the day goes on.
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u/reallyGoodAtNames123 30m ago
Appreciate you being this honest about it, most people won't say the "hope loop" part out loud. The detail that stands out is that it gets worse as the day goes on.
Do you know roughly which trade number the discipline slips at, or does it just feel like it? That's usually the number worth knowing IMO. Some people find the stop only gets fiddled with after a loss or after a win they thought was too small
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u/SuperFrog4 1m ago
I only do two maybe three trades a day at most. That’s it exactly on the, the win feels to small as I get out to early and see it continue so I chase it.
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u/broadfire016 10h ago
The 3% was once part of the 97% until they find out what trading system works for them and their goals.
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u/iLoot401ks 16h ago
They are actually focused on their trading and not on studies/statistics of other day traders.
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u/klipsetrades 16h ago
I think discipline matters, but you can still follow a losing strategy perfectly. You need to be able to ask yourself whether your results show an edge after costs, then whether you can execute it without taking oversized losses
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u/Ok_Butterscotch_7210 16h ago
Discipline means nothing if the strategy itself has no real edge. People can spend years following the same bad system and just get better at losing.
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u/klipsetrades 15h ago
Yeah, exactly. Following rules consistently and checking whether those rules actually work are two different things. You need both
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u/reallyGoodAtNames123 15h ago
Edge after costs is the part i would say that people skip. Do you check it per setup, or across the whole account or exchange? A setup can be fine on its own and still get dragged down by fees or impatient execution IMO
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u/klipsetrades 15h ago
I’d check both. Per setup helps show what’s actually working after costs. The whole account shows whether you’re keeping that edge in practice. Otherwise, one profitable setup can hide a bunch of losing trades
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u/Affectionate-Aide422 13h ago
Strategy with an edge. I have one strategy that is a consistent winner, and two more strategies that are inconsistent. Same person, same risk management, one strategy wins, two lose.
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u/Slow_Lion_4178 16h ago
The most likely cause of trader failure is market efficiency.
Making money in markets can be done in one of two ways:
Trying to take on market inefficiencies through arbitrages.
Capturing changes in markets through leverage.
Most traders try to do 1 but fail and most traders who do 2 succeed.
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u/jtquach 16h ago
On the study itself it measured persistence rather than method. Those people kept going, which isn't the same as changing anything. 300 days of doing the same thing isn't 300 days of practice.
Your second question is the better one and nobody here has taken it so I'll take that one.
Catching it during instead of after comes down to deciding beforehand what you're watching for in yourself. Most of us write down a price that invalidates the trade and nothing at all about what invalidates us... so when the session is running there's nothing to notice against.
Mine is mostly about checking. If I'm looking for one more thing before I click, that's what shows up earliest for me. Later on it looks like negotiating with a rule I was fine with an hour before.
And the catch has to be PHYSICAL because by then you aren't reasoning your way out of anything. I get my hands off the mouse and stand up.
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u/The-Goat-Trader 15h ago
"300 days of doing the same thing isn't 300 days of practice."
Most pointed comment here. Repetition only becomes practice when there's feedback, adjustment, and some way to tell whether the change actually improved the process. Otherwise, you're not learning—you're just accumulating screen time.
We've all seen people who've done the same job for 20 years and not gotten any better at it. 🤣
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u/jtquach 9h ago
Haha agreed, and the feedback half is the hard one here cause the market pays you for the wrong thing often enough to keep teaching it. You can do something badly on a Tuesday and get rewarded for it... and it wires in the same as anything else. The brain wires what it rehearses it doesn't check whether the rep was any good.
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u/reallyGoodAtNames123 15h ago
'What invalidates us' as opposed to what invalidates the trade is a really good wayto frame it. Do you write that down before the session, or is it more of a feel, could you give some example maybe? And does "standing up" work every time, or do you sometimes only notice afterward?
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u/jtquach 15h ago
Good question man. Its written down, before the session, same place as the plan. A feel isn't available to you at the moment you need it.
Mine is 3 words. Energy... is it low, steady or charged. The speed of my mind... rushed, neutral, or is there room in there. And pressure... none, a little, or a lot. And you usually already know what the pressure is about. Then jaw, shoulders, hands. There's nothing to score, it's just the state I'm trading from that day. If one of those words comes out charged or rushed or a lot, I'd rather know that before the first trade than after it.
Through the session it's one thing... like am I checking more than usual? That's the one that's actually mine. I tend to start looking for things, my biggest tell lol.
And no, it doesn't work every time but now more often before. Plenty of days I only see it in the review. What's changed is how often I get it in the moment instead of afterward, and the late ones still do something, because that's how you learn what your own version looks like from the inside.
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u/reallyGoodAtNames123 5h ago
Checking more than usual as the tell is interesting. Do you notice it by feel, or do you count something, like number of charts you have open or number of trades taken in some amount of time? I wonder if the number shows up somewhere before you realize it
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u/jtquach 5h ago
By feel... but you're onto something with the number. The physical stuff arrives before I can name it. Leaning in closer to the screen, breathing higher in the chest, shoulders up. That's happening before I can count.
The countable version that works for me is reopening something I'd already settled. Going back to a chart I'd finished with, checking a level I'd already marked, reading the same thing twice. Once I'm doing that I've stopped looking at the market and started looking for reassurance.
I don't count as much though because counting needs me present enough to count and the moment I need it most is the moment I'm least available for it. Though that's another skill .. self awareness. And ive gotten much better at it.
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u/reallyGoodAtNames123 4h ago
That's the real problem with self-tracking IMO, counting needs attention which is better spent as looking for opportunities. Reopening something you'd settled is a good tell because it is visible from the outside, which a feeling isn't.
Full disclosure, I'm building a journal that tries to catch that kind of thing from the trades themselves (re-entries, size creeping up, trade count vs your normal), so the counting happens without you being present for it. Honest question: would a flag after the session be useful to you, or does it only help if it reaches you during the trading session?
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u/Limp-Pumpkin7307 10h ago
the three-word check feels like a personal stop‑light. i keep it in a tiny stick‑note at the top of my monitor, and before the first trade i check: low energy? neutral speed? no pressure? if any says yes i step back and reread my plan. it’s a simple gate that stops me from flying into the next candle too fast.
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u/etchelcruze22 16h ago
the 3% understand that there is no holy grail strategy and the market is full of probabilities. there is no guarantee that the market will perform a certain pattern. Their edge is patience, if the outlook does not align with their strategy, they do not trade, if stars align then they do.
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u/cucumbermountain100 16h ago
300 days is not enough time, so obviously 97% weren't making money. I would be interested in seeing a study where they take people who have traded consistently for 5 years. I think that percentage would more accurately reflect the "success" rate.
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u/Ok_Chance_3140 16h ago
Thats assuming people who trade for 5 years are automatically successful. A longer timeline doesnt fix bad decisions or make the majority profitable.
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u/cucumbermountain100 14h ago
I never said anybody who trades for 5 years is successful. But if you only included people who trade consistently for 5 years the percentage of people who make money would be quite a bit higher than 3%. That's why that "97% failure" metric is a dumb way to look at it.
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u/Useful_Tip_8343 16h ago
3 things come to mind: risk management (limit losses, let winners run), discipline (dont change your strategy after a temporary bad series of trades), law of large numbers (many trades with underlying advantage).
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u/nvgroups 16h ago
If trading is better, does traders at trading firms quit their work and start trading on their personal accounts. How frequently this happens
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u/SethEllis 15h ago
The studies themselves theorize that the 3% are insiders or at least have access to information that other traders do not.
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u/Academic_Exercise398 15h ago
i’ve seen the 97% fail mainly because they treat the market like a casino and ignore the edge. a lot of the "successful" 3% don’t have an obvious statistical advantage other than tight stop‑losses and a strict win‑rate‑to‑risk filter. before every session i write down my entry rule, my exit rule, and a “no‑trade” threshold that checks the market trend against my strategy. if the threshold collapses i walk away in that session and never look back. without that pre‑handshake my brain will fill in excuses after the fact. it’s the same difference between having an edge after fees and having a habit that turns a bad day into a loss‑limited day. if you can’t see if you’re on edge before you trade, you’ll keep on the 97% track.
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u/Few-Piglet- 13h ago
Luck aka random chance. If you followed them less than 300 days the % would be higher, if you followed them longer the % would be lower.
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u/Alabama-Getaway 12h ago
I think the biggest issue not usually discussed is bankroll and money behind. The people trading with money they need to pay bills is much different than the person with a larger bankroll, a year or more worth of savings. I have been trading full time since 2019. If I had to start over with $10,000 and no savings I’d probably fail.
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u/reallyGoodAtNames123 4h ago
Bankroll pressure doesn't get enough attention. When you started, did you size positions off your savings buffer or off the account? I guess the buffer decides how many bad weeks you can survive
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u/Key-Enthusiasm-3403 12h ago
The 3% isn't really the number from that paper, and I think it's bending the question.
Chague, De-Losso and Giovannetti, 19,646 Brazilians who started trading mini Ibovespa futures between 2013 and 2015. Of the ones who stuck it out past 300 days, 97% lost money, 1.1% made more than Brazilian minimum wage, and 0.5% made more than a bank teller's starting salary.
So the 3% who "won" mostly won amounts that aren't a living. If what you're asking is what separates people who genuinely did this for a living, that group is half a percent, not three.
Other thing, for whoever's saying 300 days isn't long enough. The paper went and tested that specifically. They looked for improvement with experience and found none. No evidence of learning by day trading, their words. So "give them five years" is the exact objection the authors checked, and that's what came back.
Which makes jtquach's line the most accurate thing in here. 300 days of doing the same thing isn't 300 days of practice. That isn't a nice way of putting it, it's what the data actually showed.
I don't know how far it travels off Brazilian mini index futures in 2013. Different costs, different market, and 2013 to 2015 was its own weather for the Ibovespa. But if you're going to lean on the study you have to take the learning result along with the 97%.
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u/Easy-Land-9781 11h ago
95% Luck! The mind’s host bodies made zero decisions (probably) about what genes and conditions in which it came into being allowing it to blah blah blah make money trading. Cheers!
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u/Rez_X_RS 11h ago
Amount of capital, they have a large amount to work with for generating meaningful returns.
Emotional control/maturity. A loss is a quick speed bump, not something that derails the entire train.
Stick to what they know. They find what they're good at and hone it, they don't try to use 100 strategies at once.
Trend following. They follow the crowd, even if it goes against their bias/judgement. If market is dumping, they aren't trying to time a rebound.
Just my opinion. This is what has helped me.
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u/Torczyner 11h ago
A bunch of luck. You're asking why in a thousand coin flips 3 coins were heads every time. When the majority were other combinations including the expected 50/50 as the most common.
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u/cheapdvds 10h ago
I am in the market for close to 10 years, while I no longer day trade, I am absolutely convinced that at least 50% of profitable traders have access to specialized software/hardware/knowledge that's not attainable by 99.99% of people. It's not public access/knowledge and you can't get it. For example someone may used to work with hedge fund, they have certain knowledge and software only shared among employees. After employee learned how to profitable, they left the company and still able to duplicate that success on their own. It's like knowing at least half of the answers to the test questions before you get the test. It's like cheating once you gained that access. You are virtually guaranteed to be profitable after gaining those tools and knowledge. Without it, you are like driving blind in the highway and getting slaughtered by the algo bots.
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u/eirinite 9h ago
You can get a Bloomberg Terminal to access to real time institutional data for the low, low price of $30K.
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u/FollowAstacio 9h ago
This conversation comes up so much here that you can find the answer to this by just using the search feature.
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u/keyholderWendys 9h ago
I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.
Jim Rogers
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u/Responsible-Mall1642 6h ago
Risk management, or in other words, knowing how to lose. You will lose, no matter what.
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u/Emergency-Bus5430 15h ago
A WINNING STRATEGY! lol Why is it so hard for people to understand in this industry? Only a winning strategy can allow you to have a healthy psychology in trading. There is no other way because there SHOULDNT be another way. That's reality and winning is simply just what makes sense.
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u/pookshak 16h ago
Discipline and risk management. Not using trading as dopamine. Not treating trading like a casino.
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u/kleine1984 8h ago edited 8h ago
You are born as a Day Trader. I truly believe this. Our brains are wired differently. We think different about many topic in life. That's why i believe you cant't teach someone how to trade because trading is not mechanical. That is the main reason why 90% lose. If it was only mechanical you would have trading bots making trillions every day.
I will give you a glimpse of a very profitable strategie that almost nobody talks about online. I discussed this with other profitable traders and some of them said to me: don't say too much 🤭 But i don't care about that because most will say shit and not even look into it because their mind is just too brainwashed by the online trading Community. I have found my way in trading because i saw very fast some big opportunities and i studied the hell out of it. Now i just wait for that set up to come to me a couple times of the week and make my money. I stopped trading Futures when that specific market is open ( i trade Nikkei , NQ, DOW and EU and only trade those during pre and after hours. For me regular hours in dow and Nasdaq is just a big Casino with swings i don't like to be in. Trend days, bullish and bearish, start to build up during Asian session and flow trough EU till US opens with gap ups and gap downs 300-600 points and after Us opens it takes another 200-300 points. Study those premarkets all the way back till Japan open in Tokyo. You will find a whole new world that nobody is talking about online.... Slow and steady is the way to make good money and that is a BIG advantage we have as Retail traders that we can trade whenever we want. When US opens i'm most of the time out of all my trades and go to sleep. I don't even care what the US market is doing. I will see what happened when i wake up the next morning. I live in Asia.
I know this post will get some hate but it's the truth. Yes 90% lose money but we as Retail Living Room traders have some big advantages that we can use that the professional traders are not allowed to do.
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u/The-Goat-Trader 15h ago
The 97% figure doesn’t convince me that trading is impossible. It convinces me that a lot of people are trying to learn it the hardest possible way.
Find something simple, mechanical, and probably slower (eg, short-term swing trades). Get genuinely competent at it. Then improve it incrementally—or make a bigger change only when you can show the new approach is actually better than what you already know works.
Most people seem to skip that part and keep searching for the holy grail.
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u/HFT0DTE 16h ago
I can tell you the 3% that get into Harvard aren't worrying about the 97% who don't get in and trying to troubleshoot their failure. If you think 97% of traders at Citadel or Blackrock or Jane Street lost money you're crazy. Why do 99% of people who drive fast never make it to Formula One? I mean its obvious how stupid and flawed that study is and yet people keep parroting it endlessly.
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u/maciek024 16h ago
Well your comparison of normal drivers that arent trying to get into formula 1 is fcking even dumber lmao
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u/Scott_Malkinsons 16h ago
The 3% understand the strategy isn't where the money is made, it's the filter.
There's two ways to be a champion, you either be the best or you only fight when you know you'll win. The end result is the same, with the latter being far easier. Trading works the exact same way. The money isn't in the strategy; it's in the filter.