Yeah, I know this headline is going to piss you off. But it’s true — day trading Futures (and stocks) is for suckers. And I have proof.
We often hear through rumor and internet chatter that “90% of day traders fail.” But these have been just that — rumors. And innuendo, that courses through the veins of a ‘faultless’ internet.
But we also know that the internet is a great fountain of disillusionment, fantasy, misinformation, and “fake news.” The internet makes it hard to believe anything. Yet, we cannot live without it.
I have a lot of friends that are Futures brokers. And I don’t use the word “friend” lightly. In fact, a good deal of my review subjects come directly from the brokers themselves. And these conversations go something like this:
Emmett, you have got to write about that YouTube scammer selling his bullshit trading indicators and courses! My clients got burned real bad.
Or,
That scammer swindled an 88 year old grandma with a magic trading system. Do something!
Too often I tell the broker, “Fool, you knew it was a scam and you could have warned your clients months ago!”
It’s not easy for a broker to call out a trading educator as a fraud or a phony. You must understand, they rely upon each other. It is a symbiotic relationship. The broker, although he hates the scammers, he also relies upon them for the opening of new trading accounts. The grinding wheel always needs grease.
The honest brokers, that have been in the business for many years — they all know the truth. Yet they will never admit it. And the truth is very simple: the higher the frequency and shorter the duration of your trading, the higher the likelihood that you will lose everything.
Let me repeat, and as simply as possible. The more you trade, and the shorter your time frame, the less likely you will earn a profit. Doesn’t that sound so harsh? It hurts to read.
But many will say, “Where is the evidence!” And, “Lambo Boy and Warrior Boy are making millions from $500 dollar trading accounts.” Sorry folks, Lambo Boy and Warrior Boy are making millions from selling hyped up magical trading indicators and front running your trades. Let’s be clear, I am not accusing anyone of committing a crime. The real crime is the self-inflicted stupidity that consumers inflict upon themselves because they willingly swallow the BS.
Regardless, let’s look at the most comprehensive and current data that suggests that ‘day trading’ is a scam.
Brazilian Futures Traders
Many of my readers might be surprised to read that Brazil is really, really into Futures day trading. In fact, most readers might be even more surprised to read that the Brazilian Emini Futures contract is 300% more popular (in terms of daily trading volume) than the ultra-popular Emini SP500 Futures contracts. Yet, the population of Brazil is approximately 38% of the US population. (320 million vs 120 million).
Just like in the United States, and other English speaking countries, the Brazilian Futures industry is filled with nearly identical quacks and whack-a-doodles peddling all manner of indicator insanity, amazing trading systems, and social media day trading hucksters. In fact, many of the people I write about also have websites in Brazil, displaying both the Portuguese and Spanish language versions.
Same bullshit — different language.
People really are the same. It doesn’t matter the color of skin, the language used, or the minor differences in weight, height or appearance. We are all the same. Our motivations are especially similar. We all need resources to survive. And we all labor the same, eat the same proteins, study the same math books, and dream the same dreams. We all want an opportunity.
Why am I making such a pointed effort to draw comparisons of Americans to Brazilians? Because some readers might be biased into believing that “American exceptionalism” or anything American must be better than anything Brazilian. But this is false. The English speakers are no different than the Spanish and Portuguese speakers — we are the same in every imaginable way.
In Brazil, day trading is a national pastime. Even more popular than in the United States. But until recently, nobody in Brazil had performed a credible study that analyzed a large pool of investor data that specifically analyzed Futures day traders.
Day Trading For A Living?
On August 19, 2019, the Sao Paulo School of Economics published a highly controversial study about Futures day traders in Brazil. This published study made front-page news across the country. Literally, nearly everyone in Brazilian society was talking about the study. Day trading in Brazil is extremely popular, and extremely controversial. Its like soccer.
On one end of the spectrum were the brokers, the educators, the software providers, the soothsayers, and indicator gypsies that have been hyping (and profiting from) the industry for years. On the other end of the spectrum were the scientific community, including social scientists, economists, and data scientists. Let’s just say that the scientific community was in the extreme minority.
The scientific community was extremely skeptical of many of the claims of “people getting rich quick” and the constant television and internet ads that promised “day trading” glory and “work from home” opportunities.
And so, the Sao Paulo School of Economics commissioned a study that tracked a total of 19,646 day traders from 2013 through 2015. The data was broken down into bite-sized chunks to better understand the data.
The first group of day traders totaled 1,111 individuals that day traded only a single day. Of this group, 29.8% achieved a profit.
The second group of day traders totaled 9,978 individuals that day traded between 2 to 50 days. Of this group, 15.5% achieved a profit.
The third group of day traders totaled 3,100 individuals that day traded between 51 to 100 days. Of this group, 8.9% achieved a profit.
The fourth group of day traders totaled 2,738 individuals that day traded between 101 to 200 days. Of this group, 6.8% achieved a profit.
The fifth group of day traders totaled 1,168 individuals that day traded between 201 to 300 days. Of this group, 5.4% achieved a profit.
The sixth group of day traders totaled 1,151 individuals that day traded greater than 300 days. Of this group, 3.0% achieved a profit.
What does this data suggest? Ironically, the data suggests that the odds of achieving day trading success is nearly identical to playing roulette at a casino. The more you play, the greater the likelihood that you will lose everything.
The social scientists were particularly surprised to discover that ‘learning’ played nearly no part in the results. For instance, it was assumed that if a person had traded 6-months and 200+ trades, that they would learn to trade better or improve upon their trading strategies to achieve greater success because they were “learning from experience.”
And this is just what the trading educators want us to believe…that we need to “learn” and over time, this “learning” will improve our results. But the data absolutely destroyed these assumptions. In fact, the more a person “learned” to trade, the worse their performance became. It seems like “practice makes perfect” does not work in day trading Futures markets.
The Brazilian traders that actually earned an income
We all know that some folks, through luck or skill, are going to achieve success. Let’s take a look at those figures now…
The first group of successful day traders totaled 17 individuals that earned an average of $16 per day.
The second group of successful day traders totaled 8 individuals that earned an average of $54 per day.
The third group of successful day traders totaled 1 individual that earned an average of $310 per day.
But here is the sad part…of these successful Futures day traders, the standard deviation of their daily profit ranged from $632 to $3,308. What does that mean? In other words, in order to consistently earn $80 per day, you would also have to experience massive daily fluctuations of between $632 and $3,308.
And based upon the data, only one person was able to earn more than a minimum wage job.
It gets worse
For those 1,151 day traders that persisted 300 days, 97% lost all of their money once commission was factored in.
Even the highest performing trader that earned an average of $310 per day ended up barely profitable once the commissions were factored in. How sad are these numbers?
In conclusion, the study stated that “It is virtually impossible for an individual to day trade for a living, contrary to what the brokerage specialists and course providers often claim.”
So what should you do?
If you are stuck in that sad wheel of constantly funding a day trading account, and constantly looking for a new ‘Guru,’ then perhaps its time to put the mouse away. At least for a while.
The sad and sorry truth is that day trading is mostly a scam. Yes, some can pull it off successfully. Just like how some people will be cured of cancer by drinking apple cider vinegar. But the overall scientific data put the odds at roughly equivalent of playing roulette. The more you play, the greater the likelihood that you will lose everything.
For those that want to take a deeper dive into the data, I have included the study below. Also, you can read the report on a full page here. Thanks for reading.
Day Trading Study
@Emmett Moore
Where is a good place to get good information on how to learn to effectively trade that way which is not just another scamfest? And by “longer term”, are you just suggesting anything longer than the daily timeframe?
There is one serious mistake in your article: Brazilian population is about 210 million people. And it was this big even in 2019, which is the year when this article was written.
So no, it is not 120 million people, it is 210 million people. And it is not 38% of US population, it is approximately 64% of US population.
Seriously, check your numbers. Right now, I am not sure if I should even believe this article. If you were this sloppy to not even check basic, easy facts that can be found by searching a few seconds on Google, how can I know that you were not sloppy also in other points of this article?
By the way, yes, I also heard about the Brazilian study, even before reading your article. I also heard about other studies that were not really positive too. Yes, day trading seems incredibly problematic and not worth your time (I am doing my research before I decide if I should even try it). So I am inclined to be on your side when it comes to the opinion on day trading.
It is just harder to take your point seriously if you make mistakes like this (the population of Brazil) in your article.
People have lost so much in binary options and. Crypto currency many Traders have failed to withdraw their funds and profits made from binary and crypto currency options, failed to use the right strategies when needed, failed to engage with the right broker, not giving their trade a break, also having too many trading accounts which is one of the cause of their lost of funds, deposits of too low or too high amount of funds and most especially, not being able to present the full history of their trade when trying to withdraw their funds and their profits. If you are out there and having problems such as these or you are a beginner, or for a good reason need to raise your standard of living or you have been scammed or you have problems withdrawing your funds and profits made from your recent trades contact him via luckkimjim @gmail.com
for more info and special guideline on how to get back your fund
People have lost so much in binary options and. Crypto currency many Traders have failed to withdraw their funds and profits made from binary and crypto currency options, failed to use the right strategies when needed, failed to engage with the right broker, not giving their trade a break, also having too many trading accounts which is one of the cause of their lost of funds, deposits of too low or too high amount of funds and most especially, not being able to present the full history of their trade when trying to withdraw their funds and their profits. If you are out there and having problems such as these or you are a beginner, or for a good reason need to raise your standard of living or you have been scammed or you have problems withdrawing your funds and profits made from your recent trades contact him via luckkimjim@gmail.com
for more info and special guideline on how to get back your fund
Day trading is a highly specialized skill, its not for everyone but to say its for suckers makes me think this website is up to something shady. Most trades in the live markets are day trades and market orders so you can imagine the number of people making profits. I am surprised this dude believes in the notion of swing trading….if you expand your horizon and start trading higher time-frames you are also stretching your luck and the uncertainty factor. If you want to make profits then never leave anything to chance not even for a sec….of course, not an easy thing to master for those who have already given up.
This is the sleaziest article I have read. After reading through this website, I suspect this domain is owned by market makers to scare retail traders from day trading. Where’s your website’s records indicating your writers are legit or have any experience trading? We’ll wait for legit documentation.
Market makers thinking they’re fooling anyone… lol. Nice try.
Just giving the statistics, nothing more and nothing less. I know it’s hard to read because we want so desperately to believe the narrative of the “investment education” industry and the brokers.
The sad and sorry truth is that the more you trade, the less likely you will be profitable. This is why the “prop trading” companies like TopStep, et all, etc etc, don’t even fund their traders with live money. Instead, they allow their “prop traders” to trade on simulators and simply cover the bets. It’s because day trading is for suckers and nearly all lose everything.
Wake up. Extend your time horizon and you greatly increase your odds of success. Trade less. Take positions only when you have the edge. Not when a phony day trading indicator flashes “overbought or oversold.”
I traded with a group on Paltalk maybe 12-13 years ago. The group broke off because the leader got sick he had to quit. I started my own paltalk room with a few guys this was around 2010. One guy joined our group who was really good I don’t even remember his name. He had traded though the dot-com I saw his account he had over 750k and made between 275-550k a year trading stocks. I tried to learn from him even following his trades it was impossible. I couldn’t figure out his system he would say he was entering the trade then say his stop was there I would stop out he would stay in the trade it would turn around and take off he would make lot of money. Another time someone joined our room he said a friend of his had a automated trading system which he letting him trade off of. The automated system made one trade a day he did get his friend to show us shared his screen but he was very secretive. I don’t even remember what it was trading could have been futures. Personally I never made any money trading I have made 150k investing in stocks. I would buy good stocks like apple, face book, when the market pulls back hold it. I wouldn’t call that trading it’s just investing. The funny thing about it back in 2007-8 I day traded GOOG, AAPL, RIMM, V, MA if I had just accumulated 500 shares in each 4 of them would have made lot of money one would have failed RIMM. My current investing is accumulate good stocks when market pulls back. I knew Google was good company, apple, V, MA are all good. TSLA is a popular stock can they turn a profit. I still have the itch to try futures again maybe paper trade a system see if I can make it work.
There’s something being left out of this conversation, that puts an unfair negative spin on trading as a career option. What’s happening, I think, is we are essentially comparing trading to other, everyday jobs. We don’t think of people in an office job only being x% successful, because we mostly base success on the amount of money we receive through a job. But most other jobs are salaried or hourly wages, and guarantee an income. However, those people may be terrible at their job, or inconsistent in terms of their performance. It may be that most of human kind is only 2% successful at their jobs, but since they receive a set amount of money regardless, we don’t think about that. So it may turn out, you can be just as as successful at trading, in terms of your performance, than at any other job; It’s just that in trading, your performance directly impacts your income. Maybe one way to incorporate this fact would be to look at successful businesses. What percentage of businesses have success, to where they sustain and grow and put food on the table for the employees and owners? I think it’s probably around the same low percentage. That’s to say, if people’s performance in their office jobs, etc., were much higher than 2%, we’d probably see a whole lot more successful businesses. I think this point can be useful in the following way: Ask yourself how you do at your real world job. If you show up late, don’t trade. If you forget to do tasks, don’t trade. If you fight with your boss, don’t trade. But if you get promoted often, recieve employee of the month and have a savings account, then you may be someone who could also have success at trading.
It’s almost as if you totally ignored all the data from the study, lol.
There is some good sense to these comments; the article is worthwhile also. There was a book called The Peter Principle – the premise was that people rise to the level of their incompetence and stay there. Some people will always excel, some will do well, some will do poorly – every endeavor in life is the same. If I discipline myself, I can trade profitably – I look for magic beans, I eat the dust.
Will the popup leave my screen if I leave a comment?
Lol. I hate that fucking popup.
sad
Also, what is “extremely popular” for you? Here in Brazil less than 1% of the population has any kind of relationship with the variable revenue market. Needless to say, less than 0,5% of the population actually “trade”, since most of the people are just buying stocks to hold for years. So, no. Trading futures is not popular AT ALL in Brazil. People don’t talk about the research because people don’t talk about daytrade in Brazil because it’s irrelevant for 99,5% of the people here. Besides, it’s as easy to win as it is to lose: just sit a kid next to each of these guys losing money and make them perform reverse orders and SURPRISE! They will be making money! This BS about “virtually impossible” is very arrogant people stating that “if I wasn’t capable of, then no one is”. Please… Don’t talk about stuff you have no idea about, it makes you sound dumb as hell.
Brazil has 120 million people? Dude… Please check your numbers, otherwise, everything you say seems as trash as saying a country has almost 50% of its actual population.
213 million
success and failure rates apply to all self-employed professions in the world. it doesn’t matter what the business is, success and failure will be the same. Employment is different as that is more in line with an updated version of slavery
I was thinking the same thing. Was in the mortgage biz and only top 1% made really good money and most everyone failed and left. Is it a scam? No. Just really hard. Also the winners of anything financial don’t share their secrets and don’t participate in studies. It’s a competition. They don’t want anybody to know how they do it.
So is there any form of investing that is condoned or recommended?
Position trading is the best option. Remember, the shorter your time horizon, the worse your odds of success. The longer your time horizon, the better your chance of success.
With the recent sell-off, you should be looking to buy and hold stocks. Focus on Dividend Aristocrats, SP100 stocks, only high quality companies. Just buy and hold. And keep adding. And then add some more.
Many of the dividend aristocrats are selling at a 50% discount from 3 weeks ago. Just today, I purchased 26 stocks that I intend to sell in a few weeks, and the other half I plan on keeping and riding it higher into the horizon.
Agree, day trading is a roulette and probability game. But the question is if those in the study had applied basic risk/reward principles, how disciplined they are and how well they know what they trade. Like in sport, there are millions going to the gym looking the same all day and only few really making a difference. So, if the study compares the average, you get exactly that…the average. Which is not exactly a proper analysis. Like, on average…well yes, you lose all day, you don’t become a top sportsman, you don’t become a top musician or engineer. But that’s life I guess. Try harder.
I have seen a Chinese study that confirms the result of the Brazilian study. I have investigated three proprietary trading firms, SMB Capital, located in New York City, Montreal Trading Group, and Maverick Trading, based in Salt Lake City but working with traders in their own homes. These groups concentrate on day trading and at SMB capital and Montreal traders work in their offices in front of six screens.
I was given a one-month trial subscription to the Maverick training program and have watched some of the videos by Montreal’s owner Moshen Hassan available from Udemy and frequently on sale for $30 down from $300. At a proprietary trading firm a trader trades with the firm’s money and takes a percentage of the profits. My conclusion from studying these materials was that I did not want to do day trading.
Nevertheless recently I became a day trader by mistake and inadvertently reaped a windfall profit of $30,000. If my mistake had been larger it just as easily been $300,000 or $3,000,000. Here’s how it happened.
I had found a stock I thought would be a good long term investment and put in an order to buy 700 shares. It executed well, but when I looked at my account’s cash and money market balance it was -$700,000. I had bought far more stock than I had the money to pay for. It took me two minutes to troubleshoot the problem and make a correction. I had mistakenly put in an order to buy 7000 shares. I promptly sold down to the 700 shares that I wanted but in my two minutes of panic the stock had risen by two points, giving me the windfall profit on my purchase. The purchase went through because I have a margin account and had sufficient margin to cover it.
Most brokers will give a customer a margin loan of four times the equity in his account and not charge him interest provided that the loan is repaid on the same day. That is the appeal of day trading – the enormous leverage available. Combine this with the fact that it is easier to predict what a stock will do in the next few minutes than in the next few days, then why don’t people make money by day trading?
I felt I had learned a valuable trick and am revealing it to Emmett Moore and his readers out of respect for him and his mission, but as for myself I shall keep it on the back burner for a dire emergency. Anyway, if I make too much money in a particular year it gets me in trouble with my wife, as it reduces the size of her social security check and she complains.
LOL! What a great story.
I have one of my own. Actually, two stories.
The first “windfall” trade for me was the time I accidentally purchased a Japanese Yen futures contract and forget to check my nightly account statement. Well, that evening the Japanese bank did “something” of which I cannot remember and it mushroomed my account by $20k — literally overnight. Of course, it could of went the other way!
The second “windfall” was back in 1998 when Russia defaulted on its sovereign debt. It was announced in the middle of the night. I was a young stupid kid and called MF Global and ordered them to short 10 full-sized SP500 futures contracts. Of course, my account did not have $250k, which was the margin for 10 contracts. I believe I had $20k in the account. But the phone clerk (this is how they did things back in the 90’s) forget to check my cash balance to see if I could handle a large size.
I stayed up all night and into the next day as the SP500 plunged. By the following day, my balance had ballooned to nearly $200k. By the time MF Global figured out what I had done, they liquidated the position…and gave me the profit. Amazing.
A good winning story is not complete without an equally painful losing story. And yes, I have a batch of those. Another time…
Having margin activated accounts can often be risky. I knew of a hs friend’s parents who blew out hundreds of k’s during the dot-com crash always trading on heavy margin and that example is very common among retailers. In my own trading journey I was burned from initially trying to do the options spread scam particularly with “methods” learned from the optionetics guy and his then “advanced GET” pushing cohort Tom Gentile. Also got my refund back from one of Sykes’ earlier scam courses where his newsletter picks were mostly all losers. (back then he used WIA for customer and subscription service which I was successfully able to nag their support for a refund showing the requisite proof of his losing trades in my tos sim account, and past losing chart action-screenshots of all his smirking jackass picks, where I suspect he probably wasn’t even trading live anymore but working on expanding his shamshow “empire” with help from whatever entities were helping to push his media “stockwhiz” narrative creation similar to those fake corporate lipsync music creations) I quit trying to trade for years, then got back in earlier this decade, but now I only daytrade futures. Someday I may get back to stocks proper, (I did a stint on sim in Ross’ room for a couple of months, and we all know how much of a joke and shamshow he and his site fakery turned out to be where in fact, I discovered tradingschools’ existence gratefully, because a chat member mentioned Emmett and the WT review before Ross or his cronies shut him up/banned. Ross replied “the guy who runs it (tradingschools) is a felon”, lol) but all I do now about stocks is sim stock “diversified” portfolios on thinkorswim. If I trade stocks live again with the “proper” account size, heck no, I won’t ever do it with margin activated. I get enough decent reduced margin per instrument contract requirement and available futures leverage with my chosen futures broker(s) and able to do well enough risking only 2-4% per trade as generally recommended.
That is so funny! I appreciate your candor. I’m also glad that you made out like a bandit on a goof up 🙂
Brazil has 210 million inhabitants, not 120 million.
You are correct! I think I transposed 210 to 120. Sloppy typing.
Nevertheless you are almost right because of these 210M actually 50% hardly know to read and write. Sad story and result of 13 years socialist government …
The poor scholarity is not a socialisty legacy but decades of bad educational policies.
Agreed.
In the US, unfortunately, we are in a sort of “dark ages” regarding science.
Hello Emmett,
I read this article and it sounds a bit contradicting after reading many other reviews thay you have done for other services, for example Axia Futures. You saying here that day trading futures, to be more specific scalping is not successful but at the same time you updated your review of axia futures, talking about demetris who seems to only be trading from the order flow and scalping the hell out of those bunds. You also issued an apology. So you sound a bit contradicting. From going to day ttading “scalping” is a scam to fully backing the axia futures guy who are mainly known to day trade futures. I am confused now…which one is it? Make up your mind please.
Great question.
Firstly, it is undeniable that +98% of day traders fail. This is supported by numerous studies, including a congressional Senate study, and numerous studies conducted by university academics. These studies encompass numerous geographic, cultures, investment venues, and span roughly 40 years. There is no “American exceptionalism” regarding the act of speculation. The act of speculation is entirely a human experience. My article tried to convey that regardless of whatever tools you think you might possess, or whatever your perceived technological advantage, that the odds are stacked against you. Essentially, regardless of who you are, or where you are located, or whatever you trade…the undeniable sticking point is that 98% fail.
The key operative is ‘98% fail.’ But what about the clever 2%? Now let’s talk about Axia Futures.
It’s true, I drafted a nuclear bomb of an article and dropped it in the middle of their office. That was my intention. But only after they ignored me. Sometimes I have to start a really nasty fight in order to get people to engage with me. After over a year of back and forth, they finally came to realize that I wasn’t going to disappear and they had to engage. Which they eventually did. To move forward, we set some ground rules on what it would take to get a new article published.
Axia Futures brought out their heavy hitter — Demetris. The basis of the new article would be based upon Demetris’s verified performance, not the groupies and wannabes in their “trading school.”
It was a fair bargain. They marched out Demetris, and they knew that Demetris had a verifiable performance. They had substance. And not just a short term bit of substance, not a selective 3-month performance summary. They had long term substantive performance figures. They wanted to shove Demetris up my ass and prove that day trading can be done, and be done with massive success.
You might think I would be humiliated by having Demetris shoved up my ass. But on the contrary, I got to spend a great deal of time with Demetris and I got a true insider’s perspective on exactly what he was doing. Sure, I was proven wrong. And that is perfectly fine with me. I love it when I am proven wrong. Why? Because the net result was that you got to read a 2000 word article and obtained information directly from the 2% fountain. The follow-up article brought you closer to the truth.
I got the audience inside the 2% of traders that actually make it. And the 2% don’t sell shit. They don’t care. They are making more than enough money and they don’t want to talk about what works, and what does not work. They don’t want to surrender their advantage to anyone. Demetris isn’t on YouTube all day selling shit. He is speculating and focusing on perfecting his craft. I got to spend a week with Demetris, and trust me, he wasn’t comfortable with the experience. He hated having to carry the water for Axis Futures. His business partners (selling the stupid courses, etc) forced him into doing it.
At the end of the day, after all the uncomfortable fighting, I got to the truth. And the truth is still that 98% fail. And its also true that 2% do make a lot of money. They both are true.
F. Scott Fitzgerald once wrote that “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time, and still retain the ability to function.” You have to take the articles that I write and weigh them in both of your hands. Accept that there are no absolutes, only odds.
I believe my articles are not perfect reflections of the truth. Yet, they reflect what is ‘most’ true. Or, as the journalist Carl Bernstein said, “We must seek the best obtainable version of the truth.” And its ‘most’ true that nearly all of the people that I write about (98%) are frauds and phonies. Maybe once a year, I find someone worth writing a positive article. Sorry, but my articles generally reflect the 98%/2% test, with 98% negative and 2% positive.
I just saw this comment Emmett only now. It’s one of the best I’ve read from you. Maybe you could make a follow up article to this article or the axia review which includes what you’ve expanded with the comment on this article. I very much agree with that general percentage, and probably even more of a harsher ratio imo where it’s like 99.8% vs. 0.2% of attempted traders each year. It’s not so much the “roulette” chances of being successful in trading, somewhat particularly daytrading on shorter timeframes, it’s about those same chances of someone achieving consistency for a substantial period of time. And then it will likely be retested for those who make it in the 0.2% of consistency year to year, with market conditions changing, or a successful trader’s strategies no longer working as well, and they then have to yet successfully adapt their strategy or have a back up or alternate one to move on to keep being successful for the next year or period. Absolutely the 0.2% or “2%” don’t sell crap and are busy performing their golden goose for as long as they can sustain it for their goals. Good to know it was only because of Demetris’ partners of Axia who seem to still be shamshow runners mainly pressured him to show proof sessions to you, where their main goal was still to sell their sham products and selling snakeoil dreams instead of doing the work of trading with true performance for themselves like Demetris.
It’s nice that a much higher percentage of US citizens can read and write compared to Brazil, but it could be in general that culturally, and economically desired by the corporate powers that most citizens are just needed to be literate enough to be brainwashed consumers and taxpayers rather than a higher percentage of science trained and competent graduates. It is kind of shocking to hear that figure about Brazil, but then again, it seems a lot of those south american countries still have extreme socioeconomic disparities and economic class differences. I recall bigmike when he expatriated to Ecuador noting extreme class disparity recognition and acceptance. Some I’ve corresponded who actually live or had lived in Brazil or a nearby country attest to very disparate regions like a main city’s nicer side is more modernized for the wealthier but the other part of town or whole regions look almost pre-industrial , or impoverished slumholes and shanty towns. Same goes for Mexico most likely where I doubt much has changed since the turn of the century.
This article is totally true. Also, to add additional scam and corruption is the “governing body” that regulates trading. The industry is legally allowed and designed to take traders money, telling you how to trade, and eventually bleeding your funds dry. Any industry that is legally allowed to touch a traders account and manipulated in a way that regulation “protects” a traders account is a (legal) scam.
I do it! I hold one or two stocks long term (currently WING and SSRM), but make most of my income day trading with REALLY STRICT RULES. My scanner is the result of thousands of stock “behaviour” (pos in bol band, pos in 20 day rng etc etc etc…).
On average I make between 1-2% / day with an 84% win ratio in 2019.
I don’t profit from sharing my tips with friends and very rarely post on Stocktwits.
It’s these people, the ones that supposedly make a fortune (Sultan at Elevate Trader for example) yet charge people for their wisdom are the ones you need to watch.
If you put the work in, analyse stock patterns, quantify and test this in a scanner, it’s easy AS LONG as you commit to your rules – This is the hardest part..
Rich, thanks for sharing. Whenever riches are involved our greedy hearts come swelling up for the gold rush. Sounds like you have found a way to work hard and consistent in trading. I’m not looking to get nasty rich, but find a fun way to provide for my family. Maybe you can help me. I am looking for a mentor.
The most successful day trader is the Renaissance Medallion Fund. It is fully automated, trades on a very short time frame, and beats every other fund.
David Jaffee is offering $1,000 to anyone who can prove he is a successful day trader. Send him your best documentation and let us know if he pays up.
David@beststockstrategy.com.
Beats all others? Really?
https://www.ft.com/content/6bd17811-3205-454e-89e4-953dce6b4dfe
Renaissance hedge fund loses 20% this year
Good catch Nadina. typical shamshow claim that they “beat all others” of vendors such as Jaffee claiming he’s the “only one” of the scams charging k’s that beats the market consistently. As for “Rich”, can’t confirm with no proof, but at least he touts following rules as a tenet of actual successful traders.
I attempted to collect on that offer but he would not accept Statements from Trade Zero America as he does not believe they are legitimate.
Very interesting!
What do futures traders in Brazil using Brazilian brokers that aren’t subjected to the same rules, policies and regulations of U.S. brokers have anything to do with U.S. traders day trading in a country where both traders and brokers have to adhere to strict rules, policies and regulations?
The Brazilian study is highly analogous to American day traders. So is the South Korean study.
Heck, the study performed in 1998 by the United States Senate also confirmed that day trading is a losers game. As a result of that thorough study, the PDT rule was enacted.
Anyone that is trying to sell you day trading courses and stock chat rooms is just pumping and dumping. At this point, pretty much everyone on the internet is aware of how the scam works. But hey, there is always a sucker willing to listen to a Nigerian Prince.
You are wrong again…just because only small percentage 4 to 6% are able to make it thru does not make it losing game.
What percentage of small mom pop shops u think make it thru 7 year mark …way way low but people still do it …how come senate did not put a report out in that?…and who trusts The politician anyways….bunch of do nothing free loaders.. That report from politicians is not any better than report from Brazil
How did they conduct that report? Look at unexperinced people who open account for first time a month before the report?…lol
Nigerian Prince!? Your comparison is way way off sir.
Spicy comment. I like it.
Obviously, we are not dealing with a snowflake.
I don’t know honestly.
https://www.reddit.com/r/Daytrading/comments/9gmqzu/a_month_of_profits/
https://imgur.com/gallery/TPH7MW2
Haha, no response.
Look, just because most people can’t do something doesn’t mean an individual can’t. Trading is hard. So is getting a degree in engineering, becoming a doctor, becoming a lawyer, starting a business that makes 100k+ a year. You think trading is a free lunch? There are no free lunches in life.
Spending 300 days finding no one succeeded yet is laughable. I didn’t get my degree in computer science for 4.5 years. And even then I wasn’t earning what the person above me is earning… “but you always have to perform!” Yeah. I have to go to work everyday and get measured on my performance… No free lunches. Stop treating trading like a unicorn. It just involves losing money which creates a harsh learning environment and it has a low barrier to entry, allowing any idiot to think he knows what he is doing.
And no, you aren’t competing with Warren Buffet. You are a small fish riding big waves. Money managers who can’t beat the market are the market in a sense. Actually learn a bit and you will understand what actual edge you have being a pipsqueak with under 1 million capital…
Thank you!
Unless it’s shown in real-time, it doesn’t count. Anybody can Photoshop and image.
https://i.ibb.co/g9B3g80/image.png
Being under-capitalised is a recipe for disaster for one endeavouring futures day trading. And then again, if one happened to have enough funds to sit through elevated volatility periods (like in 2008, or 2015), why bother to day trade anyway? I mean one would be better off financially AND mentally to buy emini or emicro SP 500 future contract(s) and hold it for whatever time horizon, the longer the better, of course. Do your self a favour, find and read a book by Gary Smith How I trade for a living – this is the only dude I know of who could prove his trading results with broker statement, and it is an eye opener in many respects. Peace.
PS – Do not trust anybody who is unable, for whatever reason, to show you his broker statement. And even if there’s a good statement but covering just a year or two – this is not valid proof of any future success, because good statement must include bear and bull markets, crushes, and all those black swans that have already – and will always – come to the market. I’d put it like this – any statement shorter than 10 years is not representative at all.
1 people who trade wildly successfully would never open a trading room 2 -people who have robust system would never sell it for few 100 or few 1000 dollars
3 it takes years blood sweat tears (10 to 20 years)
To become successful..u think they will sell the system
!!??
4 u can not call a person who opened account yesterday for a first time a trader——same way u can not call kid at first day in college doctor /lawyer if that’s what they want to be in 10 to 12 years of studying
Yes there are planty of successful day-traders
For the reasons I listed above u won’t cross path with them
This day trading letter is BS
What makes people think they can ace one of the hardest professions in the world in 4 to 5 years?
If u want easy money get a 9 to 5..it’s not for the weak
Why would brokers say day traders don’t make money
When that’s how they make their living…. it’s like a lawyer saying laws are not needed
obviously u can not do it successfully and if u think u going to find someone because of this website to teach u or make money from u are kidding yourself
Who cares about brazil. All ur brokers feedback report sounds fake
What’s funny is that u are trying to tell other people what they should do when they can not make money
From same thing U can not make money urself
This whole site is a joke. Just like all the other jokers
With trading rooms u report on!! U r just like them
Emmett stop pushing ur weaknesses on other people!
Thanks for the comment.
My article was to present scientific evidence regarding the viability of day trading. I felt like the study of Brazilian day traders is very relatable to American day traders. Obviously, you are having a difficult time digesting the science, as it collides with your internal beliefs. This is good. I want the article to really challenge you.
I dont want to ruin your hopes and dreams. On the contrary, I simply want traders to think about the nature of their trading and if “scalping” and ultra short term trading is really worth the time and effort.
Also, I want traders to try and put more focus on what is a better overall strategy, and much easier to achieve success…which is longer term trading.
In my humble opinion, it’s much easier to make a consistent profit by taking longer term trades.
People who don’t know what they are doing long term trading is just slower bleeding , if right skills are not acquired they will lose at the end.
long or short term trades depends on the personality, I don’t think there is right or wrong answer there.
Soulfire and Longshot are both right. The thing is, the definition of success in trading and the proper education of it is nebulous. You can make a killing for a while and then your edge can either go away for an extended period of time or permanently. Will you be able to adapt and sit through the drawdown or find another edge? The reality of professional trading is you don’t make constant consistent money month after month. Successful trading means you have been able to weather these ups and downs and come out ahead over the long haul. It is not uncommon for me to make $250K in the first 3 months of the year and then go through a $100K drawdown for the next 8 months because my edge is blunted and then make $200K in December because the action gets good again. Most traders will blow up during that 8 month drawdown and lose a lot more than $100K out of frustration or lack of discipline, trying to get back to their high water mark and exceed it. I’d reckon about 95% of people who want to become traders will not be able to handle this kind of turbulence in real time nor will they accept it so they quit or they run out of funds. Experience helps you to get better at things like setting expectations and risk management. Experience does not mean you ultimately “unlock the secrets to the markets”. The idea that someone out there has the secrets to the markets, and once you learn them then it’s clear sailing, is a lie. Your cumulative time in the markets does not allow you to reach a point where you can coast on your experience. The learning never stops.
Great comment. And so true.
Trading is really hard, at least for me. The hardest part, in my opinion, is following my systems and executing according to the plan. I get terribly bored.
Most of my time is not spend staring at a screen, letting the emotions of 5-minute bars dictate my day. Most of my time is spent researching and writing code. And trying to get the code to work correctly.
Interesting article and discussion. As others have eluded to, replace ‘Day trading’ with any desirable high paying career and you can run the same analogous study with virtually the same results. Or another way to look at is, name ANY career with freedom, high pay, and great hours, that you can have after a couple years. Only about 2% of American adults will achieve a doctoral degree in there lives. Does that mean when you walk in a hospital those guys performing surgery, consulting and writing prescriptions are liars and scammers (well some people may think so but nevertheless)? A physician studies/trains 12+ hours a day for 11+ years to make it. And that’s with mentors, professors, a focused curriculum, and high barrier of entry. Anyone with a laptop and $500 can take a crack at day trading. The fact that the failure rate isn’t 99.999% tells you that it’s possible. And if 10%, 20%, 50% could make it with a course and a year or 2 of training, the game would change again in such a way that limited the benefits to a select few. But in a way your analysis is exactly right. If your plan is to try for a couple years and be making a killing, you should give up now because as some of us know from experience you will go through A LOT more pain than that before you turn the corner.
“Interesting article and discussion. As others have eluded to, replace ‘Day trading’ with any desirable high paying career and you can run the same analogous study with virtually the same results.”
No, that’s a myth. Most any reasonably intelligent person with a good work ethic can become a pilot, doctor, engineer, etc. with enough effort. There’s no such guarantee with trading. You can put in 10,000 (or 100,000) hours, but may never have success…or maybe worse, have temporary success (due to “fooled by randomness” or being in a bull market at the right time)…then fail miserably. Look at all the funds that have gone bankrupt that had millions of dollars behind them and were full of PhDs. And people think a lone retail trader has a good chance of success with “enough work”? Finding a true, lasting edge in the market is extremely elusive, and practically impossible for most…unless it’s just a slight edge over buy-and-hold (still not easy). But the kind of edge a retail trader needs to trade for a living long-term is extraordinarily unlikely in the long-term. The best they do is have some success in the late 90s tech bubble or 2017 crypto market (and most people who did ended up giving back their gains).
I agree. Though I wish it were not true.
However, I truly believe that if a person puts in enough work and effort, you can be wildly successful swing trading (1-3 days) or short term trading (1-2 months).
There is plenty of edge to exploit over longer-term periods.
Of course, most traders are not that patient. It’s the inpatients that kills them.
From a personal perspective, I have been sitting on this damn GCC trade for an entire year (equality weighted commodities) waiting for commodities to have a sustained breakout. Terribly frustrating.
Agreed generally that being able to retail trade for a living is extraordinary, whether it’s being eventually lucky to find one’s own trading way that works for them, or having unique talents. It’s more like being at the top few hundred in a particular sport where those can actually make a living in funds from it so in that way far more difficult and uncertain than studying or working in a rote way to be a professional phd, doctor or lawyer or climbing up a corporate ladder due to good office politics.
I think another interesting but rarely mentioned related point in regards to the difficulty of the long retail journey attempt is that some get obsessed even after years of failure getting involved with retail trading. Which could screw up former career paths, or even cost family problems, not unlike a gambling addiction. Interestingly, but certainly not justified, some of these long term vendor scammers initially loved the idea of retail trading but eventually went over into the dark side turning point of using whatever other skills, whether personal charm or marketing talents to create bogus trading advice/education products and fool other retailers particularly monthly newbs into paying for it, past the point of conscience preventing them from doing the same things that previous scam vendors had done to them before in their earlier retail aspirant journey, mainly wasting time and funds which of course can be very harmful to newbs and their retail journeys. The worst of course is wasting a lot of time going down roads of supposed worthwhile trading ideas taught that were never proven, bogus tested, and never traded live by prior scam vendors themselves. So this scam vending malaise kind of perpetuates and infects like a cess disease and new snakeoiler generations of scam vendors emerge who resort to preying on hapless uninformed newbs rather than be uber drivers or McD workers since their previous careers were shot or sacrificed due to prior failed trading. And of course the live losing trading is often soon dropped once “business success” with fooling newbs to fund their (cert-us) lifestyles by monthly churn is achieved, and they never trade live again only using sim to shamshow a plethora of sim screens and other shamshow shenanigans. They are ALL SHAMSHOWS.
The same is true of chess players, movie actors, novelists, basketball players, racing drivers, and fashion designers. Millions of people want to be those and hardly anyone succeeds. The odds are so stacked against you in all unusual careers that it’s better not to bother. Forget your dreams. Get a job as a bus driver. The training is a few days and virtually everyone passes. Consequently, it’s one of the best career decisions you can make.
I have a sure-fire day trading scheme that’s worked 100% of the days where I’ve tried it. One was in the summer of 2004, when a “price exceeds” alert on my cell phone went off on TZOO. I whipped on my screen, and saw TZOO inexorably climbing up over about fifteen minutes, then hitting a new round-dollar high, then falling back maybe forty cents, then again climbing up to the *next* round dollar, then again falling back maybe forty cents. I realized it was a combination of a short squeeze and GTC sell orders causing a sawtooth pattern up dollar after dollar. Not having an options-approved account back then, I bought and sold TZOO five times that afternoon, each sale good for over a dollar’s gain!
I saw almost the same thing this year on April 14th, when QCOM settled with APPL. I got the alarm on my phone on QCOM, and day-traded that sucker for a few thousand in quick profit.
So there’s my “fool-proof day trading scheme,” which has worked beautifully exactly two days in the last fifteen years! (Don’t think I’ll be able to sell a course on it, though…)
But day trading is so much fun!! Actually, I have been close a few times but always end up red. Last mo w Suretrader was Gross +$1700 on 3500 equity. Of course commissions killed me. traderequity.co m has super low commissions https://youtu.be/VN_J15rmtEcbut alas, No US Residents! Chasing the dream….and they know it
.. nice, now they want to impeach Trump on a rumor ..oh yea, like Russia
Burning down the house/Pelosi wants to bring the house down like it’s 2016? ..
*drum crash :p .. Dems actually wrote to Ukraine in 2018 to investigate Trump ..1) how is (would) this be any different? 2) Investigate that (if actually)
..but they hate him so much that they still want, in their DC statehood schemes, Trump’s hotel in :p for tax revenue, lol ..
ya, i mean besides alleged whistleblower has a bias , oh , lol whose lawyers also worked for ..hillary and Schumer no waaay ..
.. resort to your MSM actually for fake news..just recently w/ this Ukraine bs.
Honest brokers would call them out ..or walk away.
There are problems here…I dunno, IBOVESPA (tho EM (and as debt but, this beside the pt) one should have in their portfolio then again safe havens don’t really exist anymore so..ie. the eurusd for that, and not even the carry trade, might as well just track US indices/German to see which way the wind blows..then again, should trade what you see, not what think, so , is this even valid) ..
Talk to Patak; ie. 450k/year; or Anthony Crudele 6-7figs .. million dollars but, talk to Mike Bellafiore of SMB ..his traders it’s an honor to wear a black shirt in the office; green = 1mill; blk x10 ..
smth i’m testing currently and will let you know/can get back to you; let’s just 🙁 say, atm it’s not looking good (like longer term of which, day trading is even more granular)..
yes; and no ..American exceptionalism is true. And not everything US is better than Brazilian
Ok, hang on ..it’s good that (lol 😀 indicator gypsies) get burnt but eco ..don’t put too much stock in them they don’t know what they’re talking abt ..I , for one, myself, welcome the rise of quants as they can just cut straight through this and look at the nmbrs, go to the data ..
practice no ..It has to be meaningful practice (moot point?) however can someone tell me exactly how you learn from experience ..b/c, me, you go by a system, that’s it ..you can pick up things, yea, but it’s discretionary w/in systematic (the best) ..
Wait, wait wait ..310 is *not min wage ..ie. 15 x 8 ..That’s $120 ..And, dude, what was the lot/pos size? ‘cos you obtain an edge then you just scale it ..hell, you replicate that to infinity all of a sudden 310 becomes 620..930 ..
It is, true, though, the higher you are (tf) the more sense everything makes; lower down you go the “noise”(and I don’t mean price action) increases it’s contradicting ..
Is it possible to day trade though? I mean, aren’t there people out there who actually do it? Like Tim Gratanni and Steven Dux? And other people who possibly haven’t made DVDs hyping themselves up? Or are all these people scammers and it’s the same as playing a roulette wheel? I want to know if there are any REAL day traders who actually make their income from day trading.
Neither Grittani or Dux are day traders.
The people that make money at day trading are the traders that take a position and let it run to fruition.
There are two way to make money at day trading: the first is to have a chat room and pump low float penny stocks, but this requires a huge advertising budget. The second is to sell a steady diet of fantasy indicators and BS courses.
Focus on longer term trading. Much easier. Actually, it’s much much much easier.
What about Dekmar Trades?
yep, you know things. but i still dream of trading from tahiti….cuz freedom. Actually the average person could benefit from swing trading small size via robinhood. Be Well
Hi Emmett, what do you think about FT71 comments about this topic starting at about 50:25 in this video? https://youtu.be/Ua_nG5IHJMQ
The video sponsored by Convergent Trading….obviously they aren’t going to agree…gotta have the dreamers and suckers to keep operations running.
for Christ sake, bro, get real, FT71 is (or at least has been for quite sometime) a shareholder in the Stage 5 brokerage firm, and as such he is purely a chat and churn vehicle, he had realised many many years ago that money aint made trading, but made having people to trade and pay you commission. C’mon
Absolutely. FT71 has long been vigged with futuresio/bigmikes as well as jigsaw as far back as close to the early years of bmt. Felton too, but he got desperate spamming posts in the forum to get more suckers to his shamshow multi-sim screens. Then got banned because he wasn’t discreet enough, Lol. There was a thread about FT71’s videos which were just a paraphrase/copy of Dalton’s book, supposedly proceeds for the small fee for the videos went to some charity, but someone proved it never did. Tradingschools hasn’t done a exposing review proper of FT71/Stage5 and Jigsaw, but guaranteed they are just blabbery shamshows as any of the other snakeoilers. Retailers and newbs need to realize that their churning is just funding the livelyhoods and losing trading(if any, probably not now) of these scams of bmt’s preferred vig “ecocess” partners for almost a decade now. Shamefully elitetrader also still vigs with shammers like ebonics-Wrbraider and plastic face posting Ken Clownful, but at least the veterans on elite are free to often call them out for the scammy cess they are. Sure there are some live retailers who found consistency, but think about it, they are like the 1% of the 1%. Like the top few 100 or so of the tennis ATP some who barely make a living at it . And for sure, they wouldn’t need to do a shamshow traducation or broker vig like fake-glasses/mustache Ross does with video despicable “intro to trading videos” on Lightspeed brokerages “education” videos page. (https://www.lightspeed.com/trading-basics/) Ross may have lost some vig with suretrader’s collapse, Emmett, but he still has plenty of vig deals with Lightspeed and other bahama brokers probably. One can see how Warrior’s scamming cess of churned newbs has funded all their marketing like their “powered” on lightspeed, lol:
http://i.imgur.com/US1vKS2.jpg
The way I have experienced a degree of success day trading is by working out what product you want to trade, find a (few) reasonable indicator(s) that works , back test the hell out of them, and just stick to the one product. Whatever product you choose must have good liquidity. And you can never enter a trade without engaging an automatic stop loss of 1%. Dont stop reading and watching Youtube videos. Its not glamorous, but it works. My strategy is just under 50% success rate. Work with both leading and lagging indicators. Just keep at it. Daily meditation and exercise is also key.
The problem with this study is that it only goes up to two years in recording performance of traders. Learning to day trade well is an extremely difficult will take much longer than two years. This study makes the wrong assumption that learning to trade is an incremental process of time, whereas it’s more like a mental breakthrough in thought on how price action works. Any successful retail day trader I’ve talked to said it took them at least a decade if not longer to learn the ropes and start profiting.
Using the same logic, one could do a study on how many people could make a living playing the violin at top concert halls, and after two years find that no one is playing well enough to do so, and therefore conclude that playing the violin for a living is next to impossible.
The study does get one main point right- that the hucksters offering “trading books, plans, or courses” claiming that trading for a living is ‘easy” and can be taught in a few weeks to a few months are scammers selling snake oil.
Ah, Malcolm Gladwell’s “ten thousand hour” rule. As I wrote the article, my mind kept wandering back to that.
In my experience, day trading is a really just a random coin flip, similar to roulette. However, it’s those pesky green 0 and 00 that tip the odds. In other words, the commissions kill the day trader. The commission costs, as the study showed was the killer for even the successful day traders.
I have two additional studies regarding day traders that I should write about: A study commission by the US Senate, which was the basis for passing the PDT Rule. And the study of Korean day traders that also encompassed a large sample size.
I trust the data.
However, all is not lost. There is plenty of money to be made. Longer-term trading is much, much easier to realize a profit. I wandered away from day trading years ago, now I just focus on longer-term systematic trading in quality stocks. And systematic short selling of high volatility “cheap” stocks.
“Using the same logic, one could do a study on how many people could make a living playing the violin at top concert halls”
The problem here is that playing violin, or soccer, or most any other skill (including many business and career skills) have clear steps to master and learning curves. It’s true that only a tiny handful make it to the upper echelon of sports, music, etc. But there are objective skills you can master.
Trading is different. You can learn chart patterns, programming languages, so-called principles (“cut your losses and let your winners run”) etc., but there’s no guarantee you’ll be profitable or even trade better than some newbie with a good luck streak. However, if you’ve been practicing chess or guitar for 2 hours a day, you’ll absolutely be better than a beginner.
And don’t get me started on “screen time,” which all the vendors talked about 10-15 years ago when I tried to day trade. You can spend 10,000 hours watching squiggly lines, but there’s no guarantee you’re learning anything. What’s worse is that you might detect (especially via backtesting) a pattern that seems to have been profitable for the last few weeks, months or years. But as soon as you put real money on the line, the market can have a regime change and it no longer works. Or maybe it was just a really lucky anomaly that stops working as soon as you discover it.
Great analogy with the violin. I have meditated seriously since 1997 and have to say that the regular exercise of meditation is the key to becoming a successful day trader. You must master fear and greed and also develop very strict discipline. Try a 10 day silent meditation retreat – and you will see what I am talking about…. Ive done 7
until you learn to predict the future then trading will be roulette
Predicting the future is extremely difficult.
However, if you can build robust models that encapsulate certain market conditions, then trading is actually doable.
The problem is that nearly nobody actually takes the time to learn how to build trading models, and instead rely upon these fake gurus and indicator hustlers.