Well, I base it on the published brokerage statistics I have seen. On average as a group traders seam to be centred in the middle, maybe in the range of +10% to -10% if I guess. Traders with <2 years experience heavily on the negative side with outsized losses and traders with >15 years experience on the positive side of the curve. Which is just logical. The more trading experience and deep market understanding you acquire, the more consistent your returns will be.
This makes sense. I think the average amateur trader should break even before commissions (exactly zero alpha). If we include "investors" then there is probably even a small positive average. But there is selection bias. Unless you get a constant supply of new customers then after a while the surviving population of traders will be those who are succesful (skillful and lucky; or just lucky). This will bias the average up. This is all before costs.... I think its possible, just, to make reasonable money day trading the cheapest futures (down to timeframes of a few hours, not minutes). However using the typical spreads on forex spread bets (the most common way of trading amongst UK punters) you're likely to have a significantly negative sharpe. With that kind of average return it isn't suprising you get 90% plus of customers losing money. (I don't want to repeat the points I made on the other thread about day trading...) This includes me (I'm an IB client). I don't actively trade forex but I need to do so to cover my futures margin. So I made maybe a dozen forex trades last year. On which I lost a small amount of money. Although I was up overall I guess I would be counted as a loser. I'm not sure how representative I am though. Was it this guy http://theessentialsoftrading.com/B.../starting-to-detail-forex-profitability-data/?
It's not going to be a bell curve. It's a skewed distribution with a fat right hand tail. The "winners" will continue to take marketshare from the "losers." So for every winner, there will be 3 losers. This is especially the case in zero-sum markets like derivatives and futures.