Bitcoin Forum

I came across an article (https://www.financemagnates.com/forex/analysis/new-study-shows-just-how-unprofitable-day-trading-is/) where researchers found that 3% of traders make money and with less than 1% making more than minimum wage.

A new study of day traders in Brazil 3 academics, 2 from the Sao Paulo School of Economics and another from the University of Sao Paulo, undertook a comprehensive analysis of options and futures day traders in local equity markets and shown that this is almost certain to be a total nonsense.

The academics looked at just under 20,000 new traders and found that, over time, they lost more and more money. Of those that traded for a single day, roughly 30% turned a profit. Conversely, only 3 percent of the people that traded for over 300 days made any money.

In fact, the researchers found that the longer that someone traded, the more money they lost. This pattern can be seen in the casino roulett, said the academics.


>> If day trading is not profitable, then why do people still do day trading?

I highly believe this would talk out about forex and stocks trading and i had read up about these percentages too.I dont know if that
one is accurate or not but they do really have the points to this very volatile market even we do talk about traditional markets like forex
where profitability would really depend on how you do play with the market.For crypto space i do believe that it is much higher
rate when it comes on making money.If it werent profitable then we cant see those multi-millions of daily volume on exchangers.

It is not possible to have accuracy on crypto trading statistics,so the article might be wrong.

Another reason could be past year is not very good for the crypto traders due to long recover phase.

I suspect the contents in the article are about forex trading.
The article does not provide a full explanation so that it raises other guesses.
That article cannot be a clue to conclude anything.

Day trading can be profitable but only if you're better than the average trader and good at managing risk. It's stressful though and hard to predict which direction the market is going short term, i wouldn't recommend it.

In my opinion it is better to trade the more longer term swings in the market which are easier to predict and don't cause as much stress. It requires a lot more patience though, sometimes you have to wait many months for your trade to work out. Easiest and probably most profitable for most people long term is to just accumulate Bitcoin now as long as there is an 50 percent discount from its high and wait for the next bull cycle to begin. This requires the most patience though, but is also the least stressful if you didn't invest too much.

I would want to get a fuller details as regards to this assertion. In crypto trading, one can make good returns with day trading though it may be very small returns per day. And in some days no return at all. If you enter a trade with a fixed average % increase, once the target is reached, you sell it up and move in to another one.

Never bother to click, anyways here is my take on crypto trading,

[1] I think there are people who making tons of money, but it could be the whales. But as far as average traders, yes it's possible that they can make good profits in days or months, but those have a lot of experience under their belt

[2] Is crypto traders are going to spill out their earnings though? I mean we love to be anonymous that's why we are here, so how can we gauge how much someone is taking home when traders are quite and doesn't want to spill the beans?

[3] We are in a bear market, so the difficulty of making money is manifested.

I will say once again that daily trading is very risky,
Daily trading is not much different from betting, we are not given the opportunity to analyze more thoroughly,
Weekly or Monthly trading is much better,
in addition to refreshing your mind and mentality, you can manage your financial strength more freely when trading.

I think we can consider trading as non profitable activity if we don't have enough knowledge to do this. Doing that study is not measurable if trading is profitable or only waste of time because all we know that they are only based their study on few participants not in all participant all over the world so it is not accurate.

Gross inefficiencies where really high probability trading setups can be found happen occasionally in most markets.

Therefore unless you have a constant edge that holds true for every day, which is the case for some HFT strategies, it doesn't make sense to force yourself to trade every day, and the commissions would  typically destroy your equity as your win rate decreases with excessive day trading...

Who took the study? It says 3 academics? Does that mean students? I don't care if they're 3 economics students. They still may not have any idea of what they're doing. Plus, 3 people is a very, very small sample size to get an idea of what is really going on. They could have picked 3 students that were barely even passing the economics class for all I know.

Crypto Trading is just dumping and holding. It may just be in my experience, I trade in the bitmex with all the leverage I have, I can't earn much since the price movement isn't just that substantial. I can't find a real trading system that works for me, none of those gurus can't create a detailed trading strategy for day trading.

Only for long term trading is all I see which somehow works though.

maybe the article mentioned about forex trading, forex trading and altcoin trading have striking differences, especially on leverage, Leverage makes a trader quickly produce profits and losses, In altcoin trading, in my opinion a lot of newbie traders are tempted by big profits, so they trade without knowing the market situation.

Yeah, day trading is also hard to do and your profit is bade on daily price volatility. If the price on that day isn't really volatile, even if you take profit, it won't big enough and it means your effort to analyze the trade isn't paid off.

Long-term trading is and will always be easier to take profit because it puts both technical and fundamental things inside.

Day trading is done with tighter stop losses. If you compare it with short or medium term trading, the chances if success is less in day trading. You play with small margins and tighter stop losses. There is big chance that you opt out of the trade with a small price movement taking little loss. Cryptos are pretty volatile and there are many noob traders here. Added to that lack of regulations leads to more trades ending in loss. A single professional trader can eat up many new traders in day trading.

I disagree with the article that says trading is not profitable. Really inaccurate, research in the article it must be questioned
about the truth. Basically, people who fail in trading I'm sure of ability trading is very low, because for people who master
the knowledge of trading. Not likely to be profitable. I also believe that people who fail one of their trading characteristics
can not control emotions and too greedy.Because the key to trading is patience and when it take profits don't delay it. It is your right
if want to believe the article. I personally do not believe in the article, because I have felt profits several times when trading crypto.

Well, those statistics are true in big part. Depending on who they have questioned they will usually get results that around 1-10% of the traders are profitable in the long term. Trading is one of the hardest things in the world, because it takes a special dedication and mental work that not everyone are capable of doing. Day trading is profitable if you know a little bit of technical analysis, how to manage risk & control your emotions.

Most people take on the trading challenge because they aspire the lifestyle of a trader, but soon they'll find themselves failing and get frustrated and quit. Remember that many big profitable traders have lost their whole account at least once  ;)

Trading is a high turnover occupation. Losing traders are constantly exiting the market but new blood is always taking their place, drawn in by dreams of big gains. That's one of the reasons day traders are sizeable in number: because so many of them are new and haven't lost their shirts.....yet.

Some losing traders are addicted to it like gambling, which probably explains the loss distribution resembling that of casino roulette. I've seen lots of people like this over the years. They come in guns blazing, overconfident, taking way too much risk, and then they blow up account after account after account. Then they disappear when all their money is gone.

It seems to me that not only daily trading today is very difficult.  Only real professionals today can make good money on the cryptocurrency market, and all those who are used to earning big profits in past years, today they begin to resent and talk about the futility of day trading.  In which case you need to work harder, analyze and practice, gaining experience and, accordingly, getting good results.

If it is as you are saying when does one buy coins to dump them? :D Believe me crypto trading is much more than just holding and dumping.

There's a strategy for day trading and I've seen people do it. You can even find videos on youtube where people day trade in real time.

High leverage is for morons. No one with sense in his brain will go over 5x leverage. If you do anyway, then you need your head to be examined.

People have become so accustomend to high leverage in crypto due to all the youtubers promoting it, that they don't realize that they are blatantly gambling. If you're gambling, chances are there that you'll lose all your money. The name of the game doesn't matter, the risk is there regardless.

If high leverage isn't risky on its own, there are also the platforms messing with the market they offer through mass liquidations. Bitmex is known for that. You never know beforehand on what side of their trade you are. It's like flipping a coin where you win some and lose some.

If you know the game "zero sum", you can certainly understand trading like forex and crypto is zero sum game, the results will be different if the researchers are researching other trades. In crypto trading, whether daily or long-term, the results will be zero sum, so half of those who lose half also gain profits, if you trade real goods that have usability they are clearly benefited, both buyers and traders.

because they believe the daily traders are more profitable,
I have never participated in daily trading, because it has a great risk and I realize that my understanding is still not enough if used in daily trading,
and another reason might be because they think daily trading is cool and looks professional, so they try it over and over despite losing it eventually.

This showed that getting profit in trading is not an easy things imagine under 20, 000 traders only 30% got profit only. Now, people still do trade because of the belief they have, it depends on mindset they've put in there mind, which was the reason for them to continue on doing it in the market.

It will depend, I tried day trading many times before way back 2017 I really earned more than I expect. Though now I do have regular job that its hard to be updated same with the market condition now but I guess we can still be profitable depending on when and how we watch and analyze the market, earnings will not depend on one group study. It will depends on our strategy, some are too skilled in day trading since they do it as their living now. I suggest we try it first and stop if not working on us so we can assess our capability in it.

That is why I prefer  a swing trader than day trader. And yeah the profit is not that big doing day trading and you will gonna analyze the market everyday and will just do a quick decisions which rather have an effect in trading. Especially if the coins you are trading is some altcoins that aren't profitable anyway. And we can't deny the fact that swing trader can be last for many days and it can take place in a period of time.

We already know how hard is trading for average traders could make money in this. Even experts never find it a simple task but rather to consider this as a serious business deal. As I could think of the study, it is most likely that more than half of the average traders are included in the study which we know that they are not really capable of doing this. Thus, it appears that more traders are losing day by day instead of gaining some.

Well, daily trading is a job that requires a lot of highly specialized skills and a rich understanding, besides these important factors, the market that gives us support is also indispensable but unfortunately these elements only gather for a few days and then disappear, that makes the majority of day traders are losing more money, instead of earning, they are too blind to the goal every day. If people relax in psychology and switch to short-term trading, the chances of profit will be higher, every day is beyond our limits

The past year and this year have been unfavourable for the traders and many people have suffered loss which they were not expecting.And day trading is not for any trader but for expert and and trained traders who have knowledge about the market and some other special skills like judgement,decision making and speculatig the prices in the market.So we cant say it is unprofitable because people have earned huge profits through it so just avoid such wrong articles.

 Because of the high level of volatility and risk invloved in day trading i don't usually do it. I prefer to buy and hold for a long period of time till when it hits my target.  By that means i am not under pressure which might cause me huge loss which most people incure from day trade

When the market is in sideways then it is the perfect time to start day trading but for beginners who didn't read the conditions well may not have to go with if they are willing to conserve their capital for long term.People who doing trading more often are not professionals,one who understand the condition and apply the best strategy to make reaps from the conditions are the best profitable traders.

Do bear in mind that this just a study and it hasn't been empirically investigated per say. I believe they conducted the study based on data made available to them. Now, Then to account  - - those traders who keep their trading records private, the amount of exchanges. Don't forget that the article is centered around forex/stock trading. Day trading is quite profitable. Don't let anybody tell you otherwise. Since it's not thoroughly investigated, there's a research gap in that area.

Indeed. The person who are capable to get something out from any market conditions are the one who really knows how trading works. They are not rushing as they're looking for every potentials that they can get around this business. Things are not going to be easy but to those who are willing to take some good opportunities it will be possible to gain profits.

when a study states that every day trading more people make losses than profits, I feel there are several reasons why people are still trading daily.

1. Daily trading certainly will not take sides with individuals, so it's likely that everyone's potential for profit will still be there. even though many people lost, but some people still benefit from it.

2. Maybe another reason is because of habit. people who have high confidence about the analysis of a coin will make that person challenged to try daily trading, and make it a habit.

How profitable day trading depends on many different factors, one such important factor is that it depends on how much capital a trader has. A 2% gain for a trader with $10k vs $100k USD makes a big difference and can spell the difference between becoming a successful full-time job or not.

But if we talk of Bitcoin alone, it does seem like long term investors have gained more than day traders.

Observing the market in sideways will be much easier with the help of indicators but it doesn't mean it always move in that way,as someone who knows about trading risk they always take out profits much sooner and will keep doing that many times rather than waiting for the big candle to show up.

Secure profits anytime you do see greens is much more wiser rather or compared to wait up for a big green candle.Ive been doing this since when i do get involved with trading.
Its much preferable because anytime the price can change up its direction thats why you do need some sort of fast reaction when it comes to selling and buying opportunities and this is where traders do differ because profitability will always vary on how you do deal with it.Its hard but its not really impossible it will depend on how dedicated and experienced you are.

Using a tighter stop loss is not a yardstick from not losing a trade as a day trader as you rightly mentioned in fact price will quickly hit a stop loss when trading volatile instruments.
A good strategy, perfect money management coupled with experience are prerequisite for making profit as a day trader however only a few trader can measured up to those criteria mentioned above while majority are the losers, the statistics by the OP is a fact that validates on my own personal experience which prompted my switching over to trade using a higher time frame with trades that last for days.

I didn’t read the entire article in the link that you post OP but it looks like the study was made for those who are into foreign exchange trading and not for cryptocurrency trading. we all know that theres a big difference between the price movement between the two. Just take a look at the starting price of a dollar and the end price and see the difference, its just a small fraction compare to trading in cryptos. Although I would say that day trading is also hard for crypto traders. Aside from knowing the back ground of the token/coin, timing is very important as well.

I am not saying everyone trading daily are making profit but it is not everyone that you see make some analysis based on their idea are right, to me, it is impossible that everyone that is trading daily are losing money and I believe that the more they even trade is the more they get use to the market which will make them to even trade better and be able to adjust to any circumstances at any time.

Let me tell you, the reason why people fail in day trading is because they are greedy, they don’t take profit when they are supposed to take it because they see it as tiny profit at that time, and they don’t know that the tiny profit they neglect is the main profit that will build up their profit depending on how many time they trade in a day. Everything all depend on our skills and strategies.

They are trying to become one of those 3% of people (as what the article is saying) that are making profit in day trading. In reality, more people are really losing money than earning, based on a lot on studies no matter what type of trading it is. That's why a newbie trader shouldn't risk 100% of capital he can, as much as possible make it decent just for the sake of learning and experience.

Day trading is more effective on the volatile market indeed, however, not for crypto because as we can see there's no big movement happening in the market now hence day trading is out of option probably, it is better if you do the long term trading. Besides, OP is more likely pertaining to foreign exchanges, not crypto that is why people choose daily trading but for crypto traders based on what market we have now daily trade seems a bad option.

This article was talking about the Forex, Stock traders, not crypto. Because I don't believe day traders are not making profits. Rather, the number of day traders is increasing incredibly. Most of the crypto supporters are becoming day/short term traders. If you have good knowledge about the crypto market, you will make profits through day trading. This statistics is totally wrong in the crypto market. In crypto, only day traders are happy enough than any otherrs section.

Green then red and this cycle follows could be the best session of traders than total green or total red which may not secure any profits for traders but as you said if we can use the conditions to us then it will be profitable.Unfortunately not many people have that patience to read the market condition and make profits from it,they will urge to make trades after trades but forgets to make reap.