According to a new research its impossible for an individual to day trade for a living

#1
I recently came across this research paper Day Trading for a Living? by Chague et al. They carried out their study in brazilian stock market.

From the Paper
We show that it is virtually impossible for an individual to day trade for a living, contrary to what course providers claim. We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and persisted for at least 300 days: 97% of them lost money, only 0.4% earned more than a bank teller (US$54 per day), and the top individual earned only US$310 per day with great risk (a standard deviation of US$2,560). Additionally, we find no evidence of learning by day trading.
The paper's conclusion was that it is highly unlikely an individual be profitable if they day trade for a living. Those individuals who was profitable took very risky trades.
 
#2
I recently came across this research paper Day Trading for a Living? by Chague et al. They carried out their study in brazilian stock market.

From the Paper


The paper's conclusion was that it is highly unlikely an individual be profitable if they day trade for a living. Those individuals who was profitable took very risky trades.
so think where opportunity hidden.... for a trade to happen u need two parties involved .

as day traders are all loosers ( as per the paper u quoted ) then those who sitting on other side of the table of these day traders are all winners .. is in it ?
 

primitivetrader

Well-Known Member
#3
I recently came across this research paper Day Trading for a Living? by Chague et al. They carried out their study in brazilian stock market.

From the Paper


The paper's conclusion was that it is highly unlikely an individual be profitable if they day trade for a living. Those individuals who was profitable took very risky trades.
for every research there is almost and always a counter research. there is no end to it. imp thing is have you tried day trading with a trading plan (assuming your trading plan is logical and rule based) and following it consistently for 100 trades? if you have done this, analyse your performance on various parameters and decide for yourself whether day trading is possible or not possible
 
#4
so think where opportunity hidden.... for a trade to happen u need two parties involved .

as day traders are all loosers ( as per the paper u quoted ) then those who sitting on other side of the table of these day traders are all winners .. is in it ?
Obviously as stock trading is a zero sum game if one gains the other will loss.The "other side of the table" as you mentioned in the thread could be a long term traders or big trading houses.
 

against_tides

Well-Known Member
#6
had this guy done trading instead of analysis..he would have earned some bucks.. :p
 
#7
had this guy done trading instead of analysis..he would have earned some bucks.. :p
Good that he did not do any trading...he would have lost money in it. Traders have been making money consistantly in daytrading....so let the research report remain in the files...successful traders make money in daytrading months after months and years after years....one has to learn the craft to be successful.

Smart_trade
 

Tejas Khoday

Co-Founder & CEO, FYERS
#8
for every research there is almost and always a counter research. there is no end to it. imp thing is have you tried day trading with a trading plan (assuming your trading plan is logical and rule based) and following it consistently for 100 trades? if you have done this, analyse your performance on various parameters and decide for yourself whether day trading is possible or not possible
Agreed.
 

Tejas Khoday

Co-Founder & CEO, FYERS
#9
Obviously as stock trading is a zero sum game if one gains the other will loss.The "other side of the table" as you mentioned in the thread could be a long term traders or big trading houses.
Not necessarily. You will be surprised that there are many consistent retail day traders.

If you have visited our thread or the Fyers 30 Day Challenge on Traderji, you will see that some traders have posted their winning certificates consecutively. They are short-term traders and have disproven the theory that it is impossible to day trade successfully (Which is required to do it for a living).

In theory, theory and practice are the same. In practice, they aren't.

Some people are just built for trading and many others learn with experiences. It's all about focus. These theories and research reports are published with so much authority and we all give them the benefit of doubt, instead of our own selves. For all you know, the guys who published the report must have burned their accounts when their trading went horribly wrong. :) Who's to say that they aren't biased?

Have you heard of the Efficient Market Hypothesis? It's an investment theory that states that all market information is priced into the stocks/instruments. It also claims that it is impossible to outperform the market by either timing or superior decision making. This theory which is taught to all CFA and finance students has been disproven by many fund managers over the last few decades. Here's a short interview of George Soros who is a strong critic of the modern-day EMH. He is a living example of the fact that efficient market theory does not belong in the real world.
 
Last edited:

mohan.sic

Well-Known Member
#10
so think where opportunity hidden.... for a trade to happen u need two parties involved .

as day traders are all loosers ( as per the paper u quoted ) then those who sitting on other side of the table of these day traders are all winners .. is in it ?
Not all goes to other side of the table. In fact no one knows how much of it actually goes.
Please count in the service industry between the tables.
 

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