Realistic Day Trading Returns – How Much Can You make?

Day trading as a topic is controversial. The returns you can make from day trading are even more controversial. On theory, day trading offers the potential for huge returns over time, if done right.

With day trading, you can get your capital to compound a lot faster compared to if you were to invest into index funds. Instead of making 7 to 8 percent annually, with day trading, it is technically possible to make that in a month.

Realistic returns for day trading depend a lot on your strategy as well as how you manage your risks and emotions while trading. Realistic and good returns are to beat the index and go up from there.

From beating the index to making 1% on average per month and from there to make the 1% weekly. I would say that is a realistic goal over time. You will have weeks and months that end up in a loss, but in the long-term making 1% weekly is completely possible and realistic if you are determined enough and have done your research.

Technically possible means that it can be done, but it surely won’t be easy. Day trading isn’t an easy way to riches, and you might easily burn your fingers if you were to enter day trading unprepared.

Can you make 1% daily day trading?

Again, technically making 1% every day the markets are open is possible. However, this comes with huge risks and there are very few people who can manage to do that kind of return day after day.

1% daily compounds over the year into huge amounts of money. I would say calculating and counting on yourself to make 1% annually every day is not a realistic goal. If you were to make that much, good for you. Most of the people can not do that, even if they have been trading for years or decades.

There is another issue with 1% daily goal. This doesn’t take into consideration that there are losing days as well. When day trading, there is always risk involved. It is nearly impossible to always end up in a profit at the end of the day. Losses are inevitable.

Is it possible to make money day trading?

Making money as a day trader is possible. Not an easy career option, but it can be very rewarding if you take your time to learn it.

According to Investopedia’s article, in 2021, the average day trader’s income is 74 000 dollars. This is the average. Some traders are making six or seven figures, while others might end their years in red and everything in between. Source.

So, according to that article, making money with day trading is completely possible. Even that some people on the internet claim it is impossible, I would say they have not succeeded in it by themselves and claim it to be impossible because of that.

More about day trading as a career in this post.

What are good returns as a day trader?

I would say if you can beat the index by day trading, you have already succeeded at some degree. Even if the potential profit is much higher, it might be unrealistic. If the index is returning 10% this year and you were to make 15% by day trading, I would count that as a win.

On the other hand, if indexes are having a bad year and returns are -5%, if you managed to stay in green by day trading, that’s a win by itself. Focus on first beating the index and then after you have established a foolproof strategy for yourself, you can aim higher.

If you managed to make 1% per month as a day trader, that would be 12% annually. If you manage to keep that up year after year, you would be beating the past average returns of the stock markets.

It is unrealistic to expect to always get returns as expected. One month you might end up in red and another make back what you lost before and something on top. The point of day trading is to be profitable in the long term, not to win every trade, every day, week, and month.

Final words

All that being said, it is possible to make money day trading. There is a lot of information on the internet about day trading. Some of that information is good; some is not. There are also people who aren’t necessarily profitable day traders on YouTube, for example, yet they are there to sell you courses.

A good source for day trading is, in my opinion, Trader Tom’s YouTube channel and website. I have mentioned his videos and content before because I think it is very valuable to the day trading community. A link to his YouTube channel is here.

Other day-trading related posts can be found here.

Hopefully this was helpful to you, have a nice day.

This is not financial or investing advice. Some estimates say that 95% of day traders lose money. Always do your research before risking your hard-earned money.