Why 80% Of Day Traders Lose Money

A recent study found that 80% of day traders lose money - which is unacceptable. Here’s why, and how you can prevent this from happening - enjoy! Add me on Instagram: GPStephan

The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF

Get 2 Free Stocks on WeBull when you deposit $100 (Valued up to $1000): https://act.webull.com/k/Vowbik9Tm5he...

Merch: http://www.GrahamStephanStore.com/

Graham Stephan Discord:   / discord  

My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamste...

According to the stock trading platform, eToro, a staggering 80% of day traders lose money over the course of a year, with the median “loss” being 36.3%.
https://faculty.haas.berkeley.edu/ode...

Now for those who aren’t aware, day trading is a style of investing in which you buy and sell a stock, or any other investment, within a short period of time - meaning, you’ll usually hold the stock for a day or two, or sometimes even just for a few hours, before you sell it.

First, a HUGE reason for such large losses is due to a lack of diversification.
Consider this…a finance professor from Arizona State University analyzed the performance of over 26,000 publicly traded stocks since 1926. The most COMMON return for an individual stock, over it’s lifetime…was a loss of 100%. And only 48% of stocks delivered ANY positive returns, whatsoever.

Given that, over the long term of day trading…your likelihood of losing money is INCREDIBLY high without a SIGNIFICANT amount of diversification…and money….and lucky timing…to pick those “winners”
https://www.kiplinger.com/article/inv...


Secondly, given that information…it was found that many investors are OVERCONFIDENT about their investment decisions, leading them to trade more aggressively…and lose more money.

A study published in 2017 found that when day traders are successful, many of them disproportionally attribute their success to ability…rather than luck. Which ultimately leads them to making riskier investments, and further contributing to these losing statistics.

Third, your own EMOTION while day trading will likely be the hardest barrier to overcome…
And when investing, we have FOUR main emotions that come to mind:
Hope - Greed - Fear - And Regret
Needless to say, oftentimes those 4 emotions will overpower ANY logic when it comes to the exhilarating thrills of making money and investing…

Fourth, unless your trading with a LOT of money - you’ll likely WANT to make riskier, profit driven investments to justify the time you spend investing.
This might cause people with less money to make RISKIER investments in the pursuit of making 1000% profits…not 30% profits…therefore, increasing their likelihood that they’ll lose money.

And fifth, the main reason I believe people lose money by day trading is because they believe it’s a quick, easy way to make money from their computer or phone with very little work.

These are people who don’t have a plan, they have no idea when they want to enter or exit a stock, hey don’t do their own research, they want to “get rich quick,” and they’ll often jump into trades on a whim because someone recommended it on reddit’s WallStreetBets.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com