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Can Day Trading be profitable for retail?

  #72 (permalink)

Market Wizard
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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?

I'll never be a 1%er, but being a 21%er ain't half bad

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