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Can Day Trading be profitable for retail?

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WLDman says...

artemiso View Post
The horizontal axis is gross (brokerage fees excluded) PnL of individual trades.

The vertical axis is cumulative probability, meaning probability that a trade makes profit of up to the amount on the horizontal axis.

If you see the orange curve, the cumulative probability of making $0 is around 79% for the group of traders in the orange curve. This means that only 21% of trades taken by accounts categorized in that group make positive gross PnL.

I can express this by cumulative profit of individual accounts on the horizontal axis too to arrive at the statistic you asked your broker for, but that isn't as a meaningful as knowing the outcome of individual trades because it's harder to normalize accounts as they have subscriptions and withdrawals, different account length etc.

Trimming it down a lot: 79% of trades taken by small accounts lose money (to market maker). Does this make sense?

Everyone interested in trading the financial markets should understand this post. Very very valuable distinctions can be drawn from the last bit of this thread. Certainly a "top ten" thread snippet in the last long period of time.


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