How Much Do Professional Traders Really Make?
One question almost every trader eventually asks is: “How much do professional traders typically make per year?”
If you spend enough time on social media, you’ll probably come across some very impressive numbers. But once we step away from Instagram and Telegram and look at actual data and academic research, the picture becomes quite different. First of all, most traders are not profitable.
One well-known study examined the performance of 66,465 traders. The investors who traded the most earned an average annual return of just 11.4%, while the market returned 17.9% over the same period.
In other words, trading more did not necessarily lead to higher returns. In this sample, it actually caused investors to give up a significant portion of the market’s return. Barber & Odean
But that’s only the beginning. In a large study of day traders in the Brazilian futures market, researchers examined people who started day trading between 2013 and 2015.
Among those who continued for more than 300 trading days:
97% lost money
Only 1.1% earned more than the minimum wage
Just 0.5% earned more than the starting salary of a bank employee Chague et al.
These numbers carry an important message: Having a few successful trades does not make you a profitable trader.
What matters is the ability to generate a positive result consistently, after trading costs. But does that mean nobody can actually make money from trading? No.
In fact, research suggests that a very small group of traders can achieve positive and persistent performance. Even great traders are wrong most of the time There’s an interesting lesson from the world of macro trading.
In an article about risk management and position sizing, Alfonso Peccatiello refers to the experience of Steve Cohen. According to that account, even his best trader was right only about 63% of the time.
For many professional traders, the success rate was closer to 50–55%.
So if a trader is right only 55% of the time, how can they make money?
That’s where something more important than win rate comes into play.
Suppose you lose an average of 1 unit when you’re wrong, but make an average of 2 or 3 units when you’re right.
In that case, you don’t need to be right all the time. So what is a professional trader really trying to do?
Not predict correctly all the time.
They simply need to lose small when they’re wrong and let their profits grow when they’re right.
And most importantly: No single trade should be capable of destroying their capital or their ability to make rational decisions.
That’s where risk management, position sizing, and drawdown control can become even more important than the analysis itself.
So, how much does a professional trader make per year?
The answer may be very different from what we see on social media: There is no single number.
We cannot scientifically claim that professional traders earn an average of 20%, 30%, or 50% per year.
What we need to know is how much risk was taken to generate that return.
Because return without risk tells only half the story. Ultimately, perhaps the most important skill in financial markets isn’t how often you’re right.
It’s this: When you’re wrong, how much do you lose? And when you’re right, how long do you allow your winners to run?
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@RezaMacroEdge
Wiley Online Library
Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors
Individual investors who hold common stocks directly pay a tremendous performance penalty for active trading. Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those ...
August 14, 2026 55
