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Is Day Trading Profitable? What Every Trader MUST Know

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Written by Timothy Sykes
Updated 8/25/2021 20 min read

New traders always ask, “Is day trading profitable?”

Here’s a better question to ask: “What can I do to work toward day trading success?” 

Profitability is unique to every trader and depends on many factors. I say it over and over again — 90% of traders lose.

How can you avoid becoming a statistic?

Having a teacher and learning from other traders is a start.

So if you’re wondering “what is day trading?” and “is day trading profitable?” … you’re in the right place…

In this post, I’ll explain how to day trade and share some simple strategies. Plus, I’ll share some of my millionaire student success stories to motivate you.

Is day trading worth it? You’ll be able to answer that question for yourself by the end of this post…

Let’s go!

What Is Day Trading?

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Day trading is when you buy and sell a stock or other security within the same trading day. You can hold your position for a few minutes, hours, or all day from open to close.

It’s different from other trading styles like swing trading where you buy and hold a position overnight or for a few days. It’s way different from investing — holding positions for months or years.

You can day trade any type of security — stocks, options, forex, futures, or commodities.

But my favorite niche is penny stocks. These stocks trade for under $5 per share. Most of them trade on the OTC markets.

They’re volatile and risky, but I love them. The volatility makes it possible for me to profit from huge price swings in a short amount of time. And I reduce my risk by following my trading rules and trading the same patterns I have for over 20 years. Now I’ve grown my account to over $7.2 million in profits.*

Want to learn more about day trading penny stocks? Start your trading education with my FREE guide to penny stocks here

How Does Day Trading Work?

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Before you can day trade, you need a brokerage account and a trading platform.

Your platform’s the most important tool for the trading battlefield. It gives you access to charts, scans, indicators, and more. It’s also where you build your watchlist and enter orders.

Your broker should offer a trading platform … but not all brokers offer the best platforms. Do your research to find the best one for you. It should offer you tools that fit your trading style and strategies.

If you trade stocks that move fast like penny stocks, you need a platform and tools that can keep up…

For me, that’s StocksToTrade. It’s designed for trading the low-priced stocks I love to trade.**

It has 40+ built-in scans, watchlists, all the trading and chart indicators you need. It also offers broker integration so you can trade right through the platform.

And the Breaking News Chat add-on feature is responsible for a huge portion of my trading profits in 2020 and 2021.* But more on this great tool later…

Get a 14-day trial of StockToTrade now for only $7.

Is Day Trading Profitable?

Some people assume day trading is like gambling … Or that traders guess and get lucky.

Sure, some traders make those mistakes. But it’s usually not long before they blow up their account.

Day trading can be profitable. But you can also lose a lot of money if you don’t know what you’re doing.

The sad reality is that the majority of traders lose. I think that’s because they don’t prepare. They have no trading plan or education.

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These traders come into the market thinking they’ll get rich quick. That’s not reality. All my top students have put in years of dedicated studying.

When millionaire trader Mark Croock was a Trading Challenge student, he watched all my video lessons and trading webinars three times! That’s a lot of study hours. But it paid off for him … He’s now made over $3.1 million in trading profits.* And he’s evolved my strategies into trading options.

If you want to trade through any kind of market, you need that level of dedication — along with rules, discipline, and the right mindset. And it helps to be part of a community of like-minded traders, like the one on Profit.ly.

How Much Do Day Traders Make Per Year?

There’s no set amount of money day traders can make. Again, it depends on so many factors. For one, is day trading your side hustle, part-time job, or full-time job? And how much is in your trading account?

Consider that and don’t expect to replace your income with trading right away. As I said, it can take years to master.

Potential profits also depend on position sizes, strategies, risk tolerance, and trading frequency.

How Many Day Traders Are Profitable?

Scrolling through Twitter and trading chat rooms can make you think everyone makes money in the markets…

Newbie traders show screenshots of daily profits and losses … but they don’t show the details like their position sizes or how much money they risked.

NEVER trust anyone who doesn’t show EVERY trade.

I want to see everything — entry, exit, position size, the thesis, and more. Profit screenshots are useless if the traders can’t back them up with full details.

My students and I share all our trades on Profit.ly. (See all my trades here.*)

Are Day Traders Successful?

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It depends. Yes, there are legitimate successful day traders. But not all are willing to share their profits and teach others their strategies.

I teach students how to day trade in my Trading Challenge.

And I have 14 millionaire students.*

It’s insane. I’ve more than doubled the number of my millionaire students in the last year.* But they didn’t find success overnight. They’ve all been in the Challenge for two, three, or four years — some even longer.

Mastering trading takes a ton of hard work and dedication. Not everyone’s willing to do what it takes…

But if you have the right mindset, patterns, and strategies, you can grow a small account over time.

Start your penny stock education with my 30-Day Bootcamp. It’s a month’s worth of lessons with daily assignments. You can work at your own pace and repeat it as many times as you like.

Bonus: It comes with “The Complete Penny Stock Course” book and my “Pennystocking Framework” DVD. That’s a $797 value — but you get all three for under $100!

I created my Bootcamp with my millionaire student Matt Monaco.* He started trading in college and has now made over $1.7 million in trading profits.* Matt’s college roommate Bryce Tuohey saw his trading success and joined my Trading Challenge too. Now Bryce has made almost $650,000 in trading profits.*

Together, Matt and Bryce alert traders to potential trades in the Small Caps Rockets chat room.* Join them in the chat room every trading day here.

Is Day Trading Profitable? Famous Day Trading Strategies

Here are some simple day trading strategies to help you get started…

Trend Following

Trend following is a strategy where you try to catch a stock as it’s reversing and ride the trend until it reverses again. Traders typically use candlestick reversal patterns and areas of support and resistance on the chart to determine entries and exits.

It can be done in any time frame. If you swing trade, watch for trends on the daily chart. If you day trade, use the intraday chart.

Range Trading

Range trading is trading a stock that’s bouncing between two areas of support and resistance. You can buy at support and sell at resistance or short at resistance and buy to cover at support.

Again, use the daily chart for swing or longer-term trades and the intraday chart for day trading.


Scalping is extremely fast day trading. It’s usually done by computer algorithms.

Scalp traders try to take advantage of small intraday price swings. They buy large positions on dips and sell into upward price movement. These traders make a lot of trades throughout the day.

Playing the News

News catalysts can create great trading opportunities. It’s one of the things I look for when I plan trades.

Companies usually release news after hours or in premarket. They rarely announce news in the middle of the trading day, but it happens occasionally.

Catalysts can generate hype and bring in high volume. And high demand for a stock can drive up the share price. Those are the kind of moves I like to take advantage of in my trading…

And it’s why I use StocksToTrade Breaking News Chat every day. It’s been a game-changer for my trading. The chat guys alert breaking penny stock news FAST. It helps me make trading plans to take advantage of quick price moves.

Get a 14-day trial of StocksToTrade with the Breaking News Chat for only $17.

And sign up for StocksToTrade’s no-cost newsletter Market Grind. It has all the daily stock news you need, delivered to your inbox every trading day before the market opens.

Is Day Trading Profitable? Day Trading Rules

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Don’t jump into trading without knowing the rules and regulations

The day trading rule that can have a big impact on how you trade is the pattern day trader (PDT) rule. It limits the number of day trades you can make if you have less than $25,000 in your margin account.

It’s OK to start with a small account — but know the rules. If you break the PDT, your brokerage can freeze your account for up to 90 days.

You might not like the rule, but you can’t change it. Accept it and move on.

Here’s another thing you must accept…

Day Trading Taxes

Two things in life are guaranteed — death and taxes.

If you make money trading, you’ll have to pay taxes.

My top tip here? Find a trustworthy accountant who knows what they’re doing. Set money aside for your taxes so you’re not hit with a big bill at the end of the year.

There’s not enough room to cover trading taxes in this post. Read more about day trading taxes here.

Note: This is in no way legal or financial advice. Always consult a licensed professional in your state or jurisdiction before making tax or legal decisions.

Is Day Trading Profitable? How Much Do Day Traders Make per Day?

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Again, there’s no set amount day traders make…

It depends on a number of factors that are specific to each trader.

If you trade small in the beginning, you might only make a few bucks a day or break even. But as you grow your knowledge and trading account over time, you can take bigger position sizes when you’re ready.

My first female millionaire student Mariana* is an amazing example of how a trader can grow a small account over time…

In June 2020, she made $38 on a dip buy. Eight months later, she made the same trade and profited $16,805.*

How to Make Day Trading Profitable

How do my students and I make trading profitable?

We work our butts off!

It takes thousands of hours watching the market, studying the past, and watching patterns play out in real time. But that’s how you find the right patterns and strategies that work for YOU.

What works for one trader might not work for another. And there are no guarantees. But you can focus on the right rules and processes…

Start Small

I don’t recommend funding your account with your life savings. Instead, start with a few thousand dollars while you learn and test patterns.

You can even paper trade while you grow your knowledge account. Try StocksToTrade’s paper trading feature. You can practice trading patterns and strategies without risking your hard-earned money.

Risk as little as possible in the beginning — aim small, miss small.

Manage Your Risk

Risk management is imperative to your trading success.

Never buy a stock without first knowing when you’ll sell. Know your goals for a winning trade, and where you’ll cut losses if it goes against you.

You can use a technical level on the chart or use a dollar or percent gain or loss. But you must have a plan. And always…

Cut losses quickly!

It’s rule #1 because it’s the best way to protect your account. Don’t let a small mistake blow up your account. Keep your losses smaller than your gains so you can grow your account over time.

Never Stop Learning

As a trader, you’ll never stop learning…

You’ll never know everything about the market. It’s not like getting a college degree and being set for a life-long career.

The market’s constantly changing. And you have to adapt to it … One day a sector will be hot and your patterns will work. The next day could be completely different.

You must learn to love learning…

Trading Challenge

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Many of my trading rules and patterns took me years to learn. I didn’t have a mentor to teach me how to trade.

I had to learn all my lessons the hard way — through trial and error and making a ton of mistakes.

It was tough. And I took some pretty huge losses. (Read about my $500,000 loss in my no-cost book “An American Hedge Fund.”)

But you don’t have to learn the hard way.

I became a teacher to help others learn how to take advantage of penny stock patterns. And I want to help traders avoid being taken advantage of by scum-bag promoters.

Now I teach students everything I’ve learned from my 20+ years of trading penny stocks in my Trading Challenge.

Students get access to thousands of video lessons, archived webinars, all my DVDs, and daily watchlists and commentary. Plus, they get weekly live trading and Q&A webinars from me and some of my top millionaire students.*

But I only accept the most dedicated students. Think you’ve got what it takes? Apply for my Trading Challenge today.

Is Day Trading Profitable? Frequently Asked Questions

Let’s tackle a few day trading FAQs…

How Much Do You Need to Start Day Trading?

I think penny stocks are a great way to start day trading. The low price of penny stocks makes them more accessible to traders with small accounts. To me, it’s how traders can potentially grow a small account while learning the rules over time.

How to Limit Your Losses When Day Trading

My #1 rule is to cut losses quickly. Don’t hold a losing position and hope the stock will go back up. Have a trading plan that includes where you’ll exit for profits or a small loss — then stick to it. Cutting losses quickly is how you can keep your losses smaller than your gains.

What Makes Day Trading Difficult?

The markets move fast. If you’re not prepared you can be left with huge losses. I think the reason most traders lose is due to lack of preparation and too much risk. You must be able to control your emotions and execute your trading plan.

The Bottom Line: Is Day Trading Profitable?

Now that you know more about day trading, what do you think?

Is day trading worth it?

For me, it absolutely is…

Day trading has made it possible for me to help others through teaching and charity while I travel the world and do what I love.***

And I believe anyone can do it — as long as they’re willing to put in the time and dedication. Are you willing to stick with it, stay disciplined, and follow smart trading rules?

I’m here to help if you are … Apply for my Trading Challenge today.

What do you think? Is day trading profitable? Let me know in the comments … I love to hear from you!


*This level of successful trading is not typical and does not reflect the experience of the majority of individuals using the services and products offered on this website. From January 1, 2020, to December 31, 2020, typical users of the products and services offered by this website reported earning, on average, an estimated $49.91 in profit. This figure is taken from tracking user accounts on Profit.ly, a trading community platform. Timothy Sykes has a minority shareholder interest in the platform. I’ve also hired Mark Croock, Matt Monaco, and Bryce Tuohey to help in my education business.

**Tim Sykes has a minority ownership stake in StockstoTrade.com.

***While Tim Sykes has enjoyed remarkable success trading stocks over the years, his primary income derives from the sale of financial education products and subscription services offered by various businesses and websites in which he has an ownership stake.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”