I'm baffled as to exactly how day traders make money. Are there day traders out there that constantly make money every year? if so, what percent are they making on their money each year? Here's my quandary My belief is that every time a day trader makes a trade they're making a 50-50 bet as to whether the stock will then go up or down, but they have to pay a brokers fee every time they make a trade. So it sounds like playing poker at a casino to me, every hand 1 person wins and other people lose, but the house always collects the antes. So if you stay at the table forever someone will take your money, the only one who's always on top is the house(the brokerage).

Then there's the aspect of taxes. So lets assume that two investors each have 100K one invests in an s&p500 index fund for 366 days the other is a day trader for 366 days.

Lets say that after the period the index guy has made 18% on his money plus 3% for reinvested dividends. While doing whatever else he wanted with his free time. So he makes 21k and it's taxed at the long term capital gain rate of 10%(pending on tax bracket).

The day trader makes 50% on 100k minus his broker fee(what do they pay? is it a daily fee? per trade?). lets assume he pays 6k per year, he doesn't collect dividends and his income is taxed at his income rate of 25%.

So the day trader made 33k and the guy who did nothing made 18,900 doing absolutely nothing. This is a best case scenario in my opinion.

So how do day traders make money, what are their trading fees? The guy in the S&P 500 could have easily worked a minimum wage job and beat him. Do "good" day traders tend to make 100% or 200% per year? I don't really understand.

very few daytraders make money, probably like 5%.