trading statistics

Trading Statistics 2024: Truths And Facts (From Traders)

This article looks at the world of trading, uncovering trading statistics, truths, facts, and realities that shed light on many things you probably didn’t know about trading in stocks, futures, ETFs, and crypto. But first some key takeaways.

Key Takeaways: Trading Statistics

  1. Handling Losing Streaks: 53.3% of traders continue trading despite drawdowns, while 31.1% reduce their position size during losing streaks.
  2. Use of Leverage: 43.6% of traders frequently use leverage, and 40% use it occasionally, indicating a high prevalence of leverage in trading strategies.
  3. Risk Management Preferences: Position sizing is the most popular risk management tool among traders (43.1%), followed by stop-loss orders (27.5%).
  4. Reviewing and Adjusting Trading Strategies: 34.3% of traders review and adjust their strategies annually, while 31.3% do so monthly.
  5. Preferred Asset Classes for Trading: Crypto and futures are tied as the top asset classes for trading opportunities, each with 31.9% of the vote. Forex is least popular, with only 6.9%.
  6. Trading Styles: Swing trading is the preferred style for 43.3% of traders, with day trading coming in second at 28.3%.
  7. Trading Platforms: TradingView leads as the most popular platform (35.5%), with Python as a close second (33.3%).
  8. Asset Class Preference: Stocks are the preferred asset class for 47.6% of traders, with futures coming in second at 38.1%.
  9. Importance of Backtesting: A significant 73% of traders consider backtesting extremely important to their trading.
  10. Biggest Trading Challenges: Finding good trading strategies is the biggest challenge for 50% of traders, followed by dealing with losses (25%).
  11. Challenges in Backtesting: The biggest challenge in backtesting is applying the strategy to real-time trading (34.9%), with finding good historical data as a close second (31.7%).
  12. Trader Experience: 61.9% of traders have been trading for at least three years, and 32.6% have been trading for over ten years.
  13. Time Allocation to Trading: 39.1% of traders work full-time in trading, while 43.5% are hobby traders.
  14. Profitability: 60% of traders almost never or just sometimes make a profit.
  15. Emotional aspect: Dealing with losses is the most frequent emotional aspect in trading.

This article looks at the world of trading, uncovering trading statistics, truths, facts, and realities that shed light on many things you probably didn’t know about trading in stocks, futures, ETFs, and crypto.

Trading in financial instruments is popular, we guess it has always been. The dream of easy money! Not working for the man! Become independent! Trading statistics matter!

The rise in home office work has also increased interest in trading. It’s the dream of not working for a man but being independent.

However, trading is not easy and certainly not for the faint of heart. Trading is actually pretty demanding and difficult. Just look at the results below from our polls, and you’ll understand why most short-term traders lose money. Yes, you heard that right – most traders lose money.

Most of the statistics are based on polls we have conducted on our Twitter profile. Thus, our statistics are based on real numbers and not taken out from the a**.

That said, the reader polls have limitations. They’re based on anonymity, but we believe they’re a lot better than most of the things you find on the internet. Also, they might be somewhat biased because of the readers who follow us.

If you have any trading statistics that should be included from other sources, not to mention reader polls that we should cover, please don’t hesitate to contact us.

You might also find our guide to crypto statistics, options trading statistics and day trading facts interesting.

The results are interesting, so let’s look at the results for our dive into lots of trading statistics:

How Traders Handle Losing Streaks In Trading? – Trading Statistics

There will come a time when you encounter a losing streak that causes your capital to take a hit. This is known in trading as a drawdown.

Losing is an unfortunate inevitability in trading, and while nobody enjoys it, it’s a part of the trading process. How you handle a losing streak in trading is extremely important. Most traders fold and give up, but mostly because they don’t have a plan in the first place.

We interviewed a number of traders to understand how they approach and manage drawdowns.

This is what our readers say:

How Traders Handle Losing Streaks In Trading
How Traders Handle Losing Streaks In Trading

Our Twitter poll shows that most traders handle a losing streak in trading by plugging on despite the drawdown (53.3%), while others reduce the position size (31.1%). 

How popular is leverage for traders? – Trading Statistics

In trading, success hinges on a positive expectancy, and leverage can be a powerful tool to amplify your edge. It looks so easy: just add 2x leverage and you double your money!

Unfortunately, very few think that you could go belly up twice as fast, and for many, with certainty.

The delicate balance between greed and fear is paramount. Losing a significant portion of your capital can severely hinder your ability to recover.

We posed the question: Should leverage be a part of your trading strategy?

We asked our loyal followers on Twitter and they indicate that leverage is useful and they use it frequently:

How popular is leverage for traders
How popular is leverage for traders

43.6% of the respondents use leverage frequently, and 40% occasionally. Thus, most traders use leverage!

We use leverage ourselves, but we are extremely systematic. If you know what you are doing, we believe leverage in small doses are good.

The most popular way for traders to manage risk

There are a few ways for traders to manage risk. We define risk as losing money in the form of temporary or permanent drawdowns.

Of course, no one knows if it’s temporary or permanent, hence traders seek alternatives to lower drawdowns as much as possible.

In a recent Twitter poll we asked our readers what they favorite risk management tool is:

  • Stop loss orders
  • Position sizing
  • risk reward ratio
  • diversification

You can, of course, use many of these tools together. However, personally, we are no fans of stop loss orders. It’s probably the most overhyped risk tool there is. We like to use strategy diversification as our main tool as an alternative to a stop loss.

The how do you manage risk in trading? poll looks like this:

The most popular way for traders to manage risk
The most popular way for traders to manage risk

43.1% of traders use position sizing as their main risk tool, while an ordinary stop-loss order came in at second with 27.5%.

How Often Do You Review And Adjust Your Trading Strategy?

Trading should be a constant feedback loop, as indicated in Annie Dukes’s fantastic book called Thinking In Bets.

As part of the feedback loop, traders should always review and perhaps adjust a trading strategy, but only as long it’s based on rational decisions. Be careful if you find yourself fiddling too much.

It’s too easy to fiddle with a trading strategy, and this should be avoided. Don’t fall for the temptation of making a good trading strategy “perfect”, and thus ruining it due to curve fitting.

We asked our followers on Twitter the following question:

How often do you review and adjust your trading strategy?

How Often Do You Review And Adjust Your Trading Strategy
How Often Do You Review And Adjust Your Trading Strategy

We find the poll promising:

34.3% adjust and review their trading strategy annually, while monthly come in a second at 31.3%. 

A strategy should rarely be adjusted monthly; it’s too frequent, but annual is okay.

Best Asset Classes For Trading Opportunites

All assets are not the same. You can’t expect a certain trading strategy to work on all assets.

We asked:

Which Asset Class Offers The Best Trading Opportunities?

This was the question we asked our 12,000 followers on Twitter (the followers we had at the time we conducted the poll).

The result of the reader pool looks like this:

Best Asset Classes For Trading Opportunites
Best Asset Classes For Trading Opportunites

Crypto and futures offered the best trading opportunities, with 31.9% of the respondents each. Perhaps surprisingly, forex came dead last, with only 6.9%.

Which Trading Style Are Most Popular?

Each trader normally has his or her own trading style. This could be based on discretionary trading or perhaps systematic trading. We believe the latter is the best approach.

Again, we asked our Twitter followers, about 12,000, at the time of the poll, “Which trading style do you prefer?”

The result of the poll looks like this:

Which Trading Style Are Most Popular
Which Trading Style Are Most Popular

43.3% of traders prefer swing trading as their trading style, while 28.3% prefer day trading. 

Which Trading Platforms Are Most Popular Among traders?

For many, choosing a trading platform is one of the major decisions they make. There are plenty to choose from. Personally, we use Amibroker and Tradestation (we have covered Amibroker vs. Tradestation in a separate article).

Over the last year, TradingView, has become very popular.

There are switching costs because each platform normally has its own coding; thus, it matters which choice you make.

We tried to establish this:

Which Trading Platform Do Traders Use?

The result from our Twitter poll ended like this:

Which Trading Platforms Are Most Popular Among traders
Which Trading Platforms Are Most Popular Among traders

TradingView is the most preferred trading platform with 35.5% of the votes, while Python came in at second with 33.3%

Which asset class do traders prefer?

We are stock traders, but others might prefer to trade other assets.

We asked our Twitter followers: Which asset class is the most popular for traders?

The result looks like this:

Which asset class do traders prefer
Which asset class do traders prefer

47.6% of traders prefer to trade stocks, while futures is the second most preferred asset at 38.1%.

The Importance Of Backtesting For Traders? – Trading Statistics

All trading strategies on this website are backtested. Thus, it’s no surprise that we are fans of backtesting, and perhaps our followers are biased toward backtesting.

Nevertheless, we decided to ask our readers: How important is backtesting to your trading?

The result is perhaps as expected:

The Importance Of Backtesting For Traders
The Importance Of Backtesting For Traders

73% of traders rank backtesting as extremely important, and 13.5% as moderately important. 

What Are Traders Biggest Challenges?

As a trader, you face challenges every day. Not only is it difficult to find profitable trading strategies, but you also need to fight the demons inside: how do you handle inevitable losses?

We wanted to ask our readers the following question: What is your biggest trading challenge?

The poll we ran left no surprises:

What Are Traders Biggest Challenges
What Are Traders Biggest Challenges

50% of traders regard finding good trading strategies as their biggest trading challenge, and 25% say dealing with losses is their biggest trading challenge. 14.6% say sticking to the trading plan is the main obstacle, and 10.4% say managing emotions is their biggest trading challenge.  

Traders Biggest Challenges When Backtesting Trading Strategies?

Backtesting is far from as easy as it seems, and there are many aspects you need to consider.

Because of this, we decided to ask our readers the following: What is your biggest challenge when backtesting trading strategies?

The result is indicated here:

Traders Biggest Challenges When Backtesting Trading Strategies
Traders Biggest Challenges When Backtesting Trading Strategies

34.9% of traders say that applying the strategy to real-time trading is their biggest challenge when backtesting strategies, and 31.7% voted that finding good historical data is the most challenging. 

How long traders have been trading

Most traders lose and quit after a short period. Because of this, we decided to run a poll asking our Twitter audience the following question: How long have you been trading?

This was the result:

How long traders have been trading
How long traders have been trading

61.9% have been trading for at least three years. More impressive is that 32.6% have been trading for over ten years! We assume that they are not unprofitable traders when they keep on plugging year after year. 

How much time should I allocate to trading?

Trading is not easy; you should spend time and work systematically to succeed and make money. We wanted to find out how serious traders are, so we asked our Twitter followers: How much time do you allocate to trading?

Let’s look at the result:

How much time do I need to allocate to trading
How much time do I need to allocate to trading

39.1% of traders work full-time, and 43.5% are hobby traders. It’s a surprise to see so many full-time traders!

How often do you make a profit from trading?

We know that most traders don’t make money, so we ran a poll on Twitter to find out if our followers make money trading. This was the result:

How often do you make a profit from trading
How often do you make a profit from trading

20.8% almost never make a profit, while 39% sometimes make a profit. Thus, about 60% probably don’t make money at all, while 40% probably make some decent profits.

This confirms that trading is difficult!

What emotional aspect of trading do you struggle with the most?

Even if you have a trading strategy or strategies that make money, many traders still struggle to make money because they can’t follow the rules because of trading biases – cognitive errors. This is is the result of our informal poll on X (Twitter):

What emotional aspect of trading do you struggle with the most
What emotional aspect of trading do you struggle with the most

Not surprisingly, most traders struggle to deal with losses, which, unfortunately, are part of trading. While 39.4% struggle to deal with losses, 27.3% don’t have the patience to wait for the right trade. Perhaps due to a lack of patience, traders also fear of missing out too, called FOMO.

Conclusion

Gathering trading statistics is not easy, but we believe anyone can learn some important lessons from this article.

If you have any trading statistics that should be included from other sources, not to mention reader polls that we should cover, please don’t hesitate to contact us.

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