Day Trader Demographics and Statistics [2024]: Number Of Day Traders In The US (2024)

FAQs

What are the demographics of day traders? ›

Day Trader demographics by race

The most common ethnicity among day traders is White, which makes up 66.3% of all day traders. Comparatively, 12.4% of day traders are Asian and 11.5% of day traders are Hispanic or Latino.

Over 80% of day traders lose money in the first year due to poor risk management. The statistic “Over 80% of day traders lose money in the first year due to poor risk management” implies that a significant majority of individuals who engage in day trading experience financial losses within their first year of trading.

Research by Aite Group shows that close to a quarter of U.S. adults with access to the Internet are retail online traders and an additional 6% are professional traders, together equivalent to a self-directed US trading population of more than 54 million adults.

Also, the profitability of day trading depends significantly on the trader's skill, strategy, and the amount of capital they have for trading. Therefore, while day trading can be risky and challenging, with the right approach and a sound strategy, it can be a profitable venture.

On average there were 450,000 individual day traders during each year, of which about half (277,000) traded in amounts larger than $20,000 USD-equiv each day.

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

Estimates vary, but it's commonly accepted that only around 10% to 15% of day traders are successful over time.78 This low success rate is attributed to the high risks, the need for substantial skill and experience, and the intense competition in the financial markets.

Profit Margins

Some traders aim to earn 1%-2.5% of their account balance daily. It should be noted that higher risks usually accompany higher returns and that traders who risk more have a higher potential to blow out their trading accounts. Many profitable traders attest to the importance of proper risk management.

Approximately 1–20% of day traders actually profit from their endeavors. Exceptionally few day traders ever generate returns that are even close to worthwhile. This means that between 80 and 99 percent of them fail.

I read some stats somewhere a while ago that the average for daytraders was mid 40's. Made of people who wanted to change careers.

What is the failure rate of day traders? ›

It is estimated that 80% of day traders quit within the first two years, and nearly 40% quit within one month. After three years, only 13% remain, and after five years, only 7% remain. The average individual investor underperforms the market by 1.5% per year, while active day traders underperform by 6.5% annually.

The current estimate is 158 million people trade on the stock market daily.

The number of trading days can vary each year. In 2024, the expected number of trading days in the United States is approximately 252.

What Is the 11am Rule in Trading? If a trending security makes a new high of day between 11:15-11:30 am EST, there's a 75% probability of closing within 1% of the HOD.

If descriptions of discipline, patience, decisiveness, adaptability, and comfort with ambiguity haven't turned you off day trading, you likely have some degree of mental fortitude. That's good, as it's a core trait of successful day traders.

The average age of stock traders is 40+ years years old, representing 58% of the stock trader population.

Conclusion: Approximately 1–20% of day traders actually profit from their endeavors. Exceptionally few day traders ever generate returns that are even close to worthwhile. This means that between 80 and 99 percent of them fail.

The key to managing risk is to prevent one or two bad trades from wiping you out. If you stick to a 1% risk strategy, set strict stop-loss orders, and establish profit-taking levels, you can limit your losses to 1% and take your gains to 1.5% or above.