Is It Possible to Make Money Day Trading? Can You Make Money Day Trading? (My Numbers 2002-2012 – Real Money)
Last Updated on July 8, 2022
I get a lot of e-mails about day trading. The typical question is: Is it possible to make money day trading? Can you make money day trading? How to succeed in day trading?
My simple answer is yes, of course, it is possible to make money day trading, I have done it myself and made enough to become a FIRE. But can YOU make money day trading? That depends on a lot of factors.
In this article, I partially reveal my own numbers to show it’s possible to make money day trading. Furthermore, I try to explain why you are unlikely to make money day trading.
Is it possible to make money day trading?
This is the first article, of many, where I will try to actually give some hard evidence of how many are making money day trading, and how much, for good or worse.
Today I will reveal my own numbers from 2002 until May 2012.
These are two other relevant articles about the possibility of making money day trading:
- Is It Possible To Make Money Day Trading? Part 2: Automated trading
- Is It Possible To Make Money Day Trading? Part 3: Tuco Trading
Let’s first establish some unfortunate facts: even though it is possible to make money day trading, it’s no easy way to riches. Most likely you will end up finding out this has been a waste of money and/or time. I think there are other businesses that have a higher and better survival rate than day trading.
Do swing trading before you do day trading
I think you are better off trying swing trading before you start day trading. At least you have the opportunity to participate in the upward bias in the stock market.
Please check out our free trading strategies to get an idea of what swing trading is all about.
Day traders normally get wiped out quickly
I have been doing day trading since 2002 and I have witnessed a lot of turnover in people starting and quitting, but I happen to know some people who have been doing this longer than I have.
Like any business, this requires preparation and strict discipline. Surviving the 2-3 years of learning is the key to success. I am only trading stocks and I only know stock traders. No futures, options, or forex for me.
It is possible to make money day trading? (My own profit and losses from 2002 until May 2012)
Right now I am in a dry spell. 2012 is just grinding and I find it very hard to make good money. There are several reasons for this which I will get back to later.
Let’s look at the summary of my own trading statistics from 2002. Hopefully, the numbers can give some motivation for other traders.
This is my key numbers from January 2002 to May 2012:
- In total, I have traded 2545 days
- 2182 days have been profitable (net after commissions), ie 85,7% (2011 and 2012 makes the average lower)
- Two losing months: January 2012 and April 2012
- Worst day: 16th of august 2007, 22 154 USD in losses
- Best day: 21st of April 2006, 37 246 USD in profits
- Best year: 2008 (only 8 losing days that year)
- Best month: October 2008, 220 000 USD
- Total number of shares traded: almost 170 million
- Value of shares traded: approximately 5.1 billion USD
Here is a graph showing my accumulated profits since the start (number of days on the x-axis, 2002 until May 2012):
The graph illustrates why many are tempted to day trade: there is no significant drawdown and you can make decent money out of a small deposit.
2006 to 2009 were the really stellar years. I had just 15 losing days in 2006, 17 in 2007, and 8 in 2008.
During 2002 and 2003 I built my foundation and I got to learn and get experience.
However, the conclusion of this graph is the following: The first third is nice, I love the middle third and the last third is quite depressing.
Why do I write this? This is mainly twofold: to show others it can be done and it motivates me to work harder and keep on looking for edges.
Conclusion: Is it possible to make money day trading?
Yes, but don’t expect miracles. Because short-term trading is more or less like a zero-sum game, most day traders are doomed to fail. However, if you manage to be cautious when you start out and manage to learn from your mistakes, you stand a pretty good chance of succeeding.
I spent two years being slightly positive before I managed to find some profitable edges to make it worthwhile. Patience is required to succeed.
If you want to read more about day trading, I believe these two articles might provide you with more relevant tips about day trading:
Hello Friends,
I was very encouraged to find this site. I wanted to thank you for this special read. I definitely savored every little bit of it and I have you bookmarked to check out new stuff you post.
Your accumulated profit follows a logistic function. Any idea why? I believe the same dynamic follow population growth in ecology as the growth of “populations” in market niches.
http://en.wikipedia.org/wiki/Logistic_function
“The initial stage of growth is approximately exponential; then, as saturation begins, the growth slows, and at maturity, growth stops.”
This is from the Wikipedia link you pasted. I think it sums up my trading.My niche has been looking for structural inefficiencies, but as algo trading have developed the roads have been crowded. However, I’m going through all my records now to find patterns. Will write about this more.
Hey guys,
These are cute theories, as one might decide to look at it. My point is this: If you believe in such product life cycle type thinking – that is exactly what you will get. So, in other words, make a conscious decision to get ready for the next leg up – and it will happen. Obviously, we have to really believe in it, as I am not talking so called positive thinking here. So, whatever our patterns, our models or whatever we use to try to get “an edge” in the market, our personal psychology will in the end be the one and only really determinate factor. And, by the way, your profitability chart looks extremely healthy!
Alf Erik
Hi Oddmund, I have followed you for quite some years. I am(was) a programmer, and have made a swing, reversion to mean software, based on a formula in your book. It has been live for some time, doing average of 1.4% percent/trade, and avg of 10 days per trade. Some difficulties with drawdowns, but I am working on it. For daytrading I am looking at the DOM. Nothing else – not even a chart – I am doing very well. Maybe you should look elsewhere for new ideas? Not just mean reversion?
All the best,
Truls
Hi Truls,
Interesting. What kind of formula are you thinking about? And what is DOM?
I guess DOM is Day Of Month. See:
http://marketsci.wordpress.com/
DOM, or Reading the tape! I am sure you know it and have tried it! It took me quite some time, but when you get enough practice it is very powerful, both for scalping, which I do, and for entries on longer trades.
For the formula, it is the standard deviation over a moving average – so pairs trading, basically. I had no luck intraday trading it, but for swing trading I am doing OK. The selection of stocks is key for success. I have had no luck using ETF’s, which I understand you are doing? Anyway, I am not putting to much effort into the swing trading software. I am currently putting all my effort into reading the tape, which is much more profitable for me.
It is all a matter of choice and what suits you I guess.
Truls!
Hi,
Yes i have tried tape reading but that is a style that does not suit me. I would like to use it, but my personality does not fit with that. I need to use numbers 🙂
So you mean mean reversion trading pairs? I stopped trading pairs some years back. I have bever traded pais using ETFs. Yes, you might do well trading pairs but as you say it’s all about stock picking. However, you’re not afraid of curve fiting?
Yes, I am worried about curve fitting, so I am using forward optimisation. All pairs are tested with forward optimisation before they are traded. Typically a 3:1 ratio. optimisation over 3 periods and trade 1 – rinse and repeat.
This is also done in the back testing, to ensure that I back test as close to reality as possible.
Truls.
I first saw your blog, you write well, this is a good post left me a deep impression at the same time gave me some very useful information. I am glad that you can share with us these, thank you! I wish you good luck.
[…] until now I have been purely daytrading (I have successfully daytraded the US stock market since 2002 full time, press this link for my resul…). However, due to algo trading I have decided to diversify into longer time frames as well, but […]
[…] My numbers […]
Intresting profit chart
seems to be exactly like mine
i started 1999 with 30k, made pertfolio to 36k, paying 40k for commissions(18$ per trade).
Fell back to 23k.Then i discovered justchart site, where was tabel with some sort of market movers, one of them showed very short term down stocks.
I used this single row that showed very lov term downs for 1-2 year and made 1 mill in taht period.From 23k->1000 000 using just one, no voiced or highlited alert i just found on some website.
Then i used realticks new high new lows alerts, than came sortwizard, then alertscanner etc.
From 2002.2006 i made 200-300k per year.2006-2008 okt maybe 400k per year.
2008 okt-2009 okt 1.2 mill.
Then i put most of my money under realestate.At that time it was nice 50% from top.
Basically that have kept me alive, producing 6-7k eur per month rentincom.
Then in nowember 2009 i took easier trading and didint notice that market was changed.It was hard to make 20-30k in month.Just some month ago i made 100k per month.
I told myself, if i cant make 1k per day i wont trade, its no point to wast my “youth” 36 years, to make so little money, its not worth to waste time.
But 6-7k eur from rent just wasnt enough to make easy living.
So i was trying periodially trade and find some way to make money, but never ever made miney as easily as before 2009 november.
Seems one key is to get 0.001 per share trades.I have to use almost for last 10 years 3$ per trade comissions.And almost all the time (80%+) traded stocks under 0.5$.
wierd, in 2000 i dint trade sub 1$ stocks at all.
2000-2001 was for me golden era, with fraction prices, deem, that was sweet.
2000-2002 to trade with 11$ comissions and to make 1.3 mill and average 50-100 trades per day.
i 2008-2009 okt i mad eaverage 500+ trades per day.
and now, algos, hft, darkpools have killed us, traders.
Hi, interesting comment. Just like you I have invested in real estate because trading is a lot harder now. I don’t know where you live, but if you can’t have a nice lifestyle with 6-7K EUR a month when you have no debt, is beyond me. I believe you live quite close to me. Feel free to drop me an e-mail to discuss trading if you like. There a re a lot of opportunities in the market. Just need to be creative and think outside the box. But mych of the easy prey is gone, unfortunately.
i have “small” debt 80k eur, it takes some 1k per month.
for living:food, gas, electricity, scool bills, pocketmone for wife and kids etc. it takes 3k more every month.
Totally 4k expenses every mont.Plus unexpected costs for car or realestate.
Whats left is 2k eur.And 2k is nothing compared average 20k per month for last 10 years.
I live in Estonia, and prices here are quite abnormal compared to other contries.
We have right now most expensive elecricity of nordic but our national average income is some 800 euros per nose.Most make 300-500eur.Natural gas is also most expensive, we pay more than germans for russian gas.
Only goody we have-no tax for companies if reinvested and not taken out from company.
Yes, I think you should be glad that you’re not living as a trader in Norway, where I coem from… Have you stopped trading?
if someone have good system for trading, how about broker who can see yor action, to copy your style or give sercret info about your trading style to his friend or to whoever?
Oh yes, I believe it happens all the time.
Hi Oddmund. Are you doing better than 2012 so far?
What other finance blogs do you follow?
Hi, yes 2013 is a lot better for me than 2012 and 2011. The reason is probably that I trade a lot more strategies, also swing trading. The swing trading is going very well since October, so I guess I’m prone to some losses now 🙁 Always after a good period there comes tougher times.
Are you a daytrader?
Yes, I am a daytrader. Mostly mean revertion strategies, but are spending my time looking for good trend strategies. Hopefully I will discover a couple of short strategies. You see, I trade 11 strategies and 9 of them are long. Any good suggestions for inspiring trading blogs?
http://www.wallstreetcurrents.com/p/quant-currents.html
Thanks! I feel like Im always spending to much time testing and tweeking on strategies, and to little time trading, observing and “learning” the market. What are your views on this? and how much time do you spend researching compared to actual trading and observation?
I rather trade a lot of strategies instead of tweaking. I trade all strategies I mention on the blog plus more. The more trades, the smoother equity curve. The more I trade, the more I discover. The more I discover, the more I test. The more I test, the more I learn….
Thanks for posting this. Can you share how much money you started with?
Yes, I’m also interesting in this question.
I think he mentioned it $30 000
[…] Here are the trading results of a day trader from Norway. "Averaged" $1475 per day over 10 years. First few years were "learning", good years 2006-2009, more challenging lately. 85.7% profitable days. Only 15 losing days in 2006, 17 in 2007 and 8 in 2008. But more recently he has had two losing months in January 2012 and April 2012. Another thing to keep in mind is that his profit is only 0.07% of the notional $5.1BN of stock traded. Edges are tiny. […]
[…] My Numbers 2002-May 2012 […]
@Oddmund: hi there, tnx for this site and for sharing your results. Would it be possible to update the chart with rasults from 2013, please? Regards, pta.
Hi, I don’t think I have the time to do it now. But 2013 was decent. Nowwhere near 2008, but I was quite pleased. 2013 better than 2012. I’m busy doing some writing now, so I rather update half year as I have done before.
Hi,
Do you know where I can learn day trading?
Strategies?
Thanks
Hi. My opinion is that noone can teach you. You have to read and test for yourself. Trial and error. University of life.
Thanks Oddmund,
Do you know which book I should read?
Is Murphys book about technical analysis good?
Ive been looking at your site , congratulations , it’s very good
Cheers
Hi. Murphy is crap, a waste of time, just subjective TA. Start with the 6 books I recommended two articles ago. That is a start.