Day trading for a living? Enormous effort, lowest reward

Day-trading consists of buying and selling the same security on the same day. Swing trading is similar, except it takes place a few days apart.

If you search for “day-trading”, you will come up with countless programs willing to teach you how to make big bucks following their system. One shows an image of a man sitting in front of a computer on the balcony of an attractive villa in the midst of an appealing Mediterranean setting, drink in hand, smile on face.

We have discouraged day trading previously.

This year, three Brazilian economics professors published a first-rate study holding the Monday Morning Program view.  (https://ssrn.com/abstract=3423101) They followed nearly 20,000 Brazilian day-traders between 2013 and 2015. Ninety-seven percent of those who continued for more than 300 days lost money. Only 1.1% earned more than the Brazilian minimum wage and only 0.5% earned more than the initial salary of a bank teller. The brokers’ earnings were wonderful, of course.

In other words, the number of successful day traders is much closer to 0% than it is to 5%.

Now, let  us change the title of this post from:

Day trading for a living? Enormous effort, lowest reward  to its opposite:

Passive investing for a living? Lowest effort, enormous reward

The above graph shows the investing results record for over 100 years! The S&P 500 could represent “Global equities”. Exchange-traded funds that track the S&P 500 are the lowest effort way to buy the S&P 500. Then, sit in your rocking chair and grow rich.


The Monday Morning Millionaire Program was designed to offer compressed investment convictions. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.

The program does not provide any investment advice or endorsements.

With fewer than 350 words, members can read this post in less than five minutes. Following and studying the links imbedded in these posts would take longer. How members manage a post depends on their level of interest and investing knowledge.

 

 

 

 

Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

Schedule Your Free Half-Hour Discussion

Get in touch with us and schedule a free half-hour discussion with Milan.