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01
Performance
Most day traders exited quickly.
More than 75% of the day traders in the study stopped within two years; poor performers were more likely to quit.
Taiwan day traders · 1992-2006
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02
Performance
The profitable group was small.
In monthly classifications, the fraction of experienced day traders with positive lifetime net intraday profits was consistently about 5%.
Taiwan day traders · monthly classifications, 1995-2006
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03
Persistence
Past losses did not stop most experienced traders.
Previously unprofitable traders generated 72% of day-trading volume across the sample - and roughly 80% in its later years.
Taiwan day traders · experienced-trader classifications
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04
Costs
Trading friction more than tripled losses.
Average day-trader losses moved from 7 basis points before costs to 23.9 basis points per day after the study’s assumed commissions and taxes.
Taiwan day traders · aggregate daily abnormal returns
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05
Turnover
The most active households trailed the market sharply.
The highest-turnover U.S. households earned 11.4% annually while the market returned 17.9%; the average household earned 16.4%.
66,465 U.S. discount-broker households · 1991-1996
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06
Behavior
Several losing behaviors repeatedly appear.
The literature documents benchmark underperformance, selling winners while holding losers, limited-attention buying, naïve reinforcement, and underdiversification.
Research synthesis across individual-investor studies
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07
Overconfidence
Believing you are above average can increase activity.
Investors who rated their skill or past performance above average - without having above-average past performance - traded more.
215 German online-broker investors with survey responses
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08
Psychology
Sensation seeking and overconfidence predict more trading.
After controlling for wealth, income, age, holdings, marital status, and occupation, both traits were associated with higher trading frequency.
Finnish investors · trading and personal-record data
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09
Performance
Individual trading carried a large annual penalty.
The aggregate portfolio of individual investors suffered an annual performance penalty of 3.8 percentage points in the study.
Complete Taiwan market trading history
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10
Execution
Aggressive orders explained nearly all individual losses.
Order-level analysis traced virtually all individual trading losses to aggressive orders; passive individual orders fared materially better.
Taiwan investors · order-level analysis
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11
Account Size
Smaller retail accounts selected future losers.
Smaller Chinese retail accounts bought future underperformers and sold future outperformers, while also showing weaker news processing and higher trading costs.
Chinese retail accounts · five account-size groups
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12
Market Access
Less waking access improved measured performance.
Plausibly exogenous decreases in waking trading hours reduced active retail trading and were associated with higher capital gains.
U.S. tax returns · time-zone-border discontinuities
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13
0DTE
Retail S&P 500 option activity concentrated in 0DTE.
More than 75% of identified retail S&P 500 options trades were in same-day-expiration contracts during most of 2022 and all of 2023.
Identified retail S&P 500 options trades · 2022-2023
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14
0DTE Outcomes
Aggregate retail 0DTE losses were substantial.
Retail traders lost $241,000 on an average day from February 2021 through September 2023; after daily expirations began, average daily losses rose to $350,000.
Identified retail S&P 500 0DTE trades · Feb. 2021-Sep. 2023
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15
Global Context
Observed retail patterns were not universal.
Only 35% of surveyed exchanges reported differentiating patterns. Round-price trading and overreaction to volatility appeared among observations, but varied across jurisdictions.
World Federation of Exchanges survey · 34 respondents
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