Trading fees are a valid counterargument here, and while they are non-negligible (especially back when the "90% of day traders lose money" rule was established), I don't think they account for the full 40%.

For point 2, if there is an expected return of 0, then on average this should push the portfolio toward 50% chance of profitability.

It is the psychological factors combined with a non-random market that ensure most traders lock in losses (usually after riding them too long or not long enough).

If I roll a 100-sided dice that pays me $99 if I roll a 1 and -$1 if I roll 2-100, then my expected value is $0, but my chance of profitability is 1%.

He's saying that traders don't just make 1 bet in their lifetimes though.

True, but you have to account for the chance of ruin. Once you go broke, you have to stop betting. Many traders will continue betting larger and larger amounts of money when they win, but stop betting if they lose big. Making risky bets is quite likely to make you go broke, especially if you scale the size of your bets with the size of your bankroll. The [Kelly Criterion](https://en.wikipedia.org/wiki/Kelly_criterion) is the best way to approach it.

Also, the average at-home trader probably doesn't sell at a random point in time. They are probably more likely to sell after a loss.

It's often the opposite which is responsible for poor trading performance, due to the fundamental anomaly of markets: trends. Poor traders don't let winners ride and let losers ride to get above their break-even point, which often results in huge losses betting against the trend.

> Trading fees. If the house takes a cut of 0.1% on every transaction, then on average those who trade more lose more money.

If you trade derivatives, fees can be very low (because these are highly-leveraged products but if you are smart you know you shouldn't take any leverage). This can save substantial money if you trade frequently.

> Risk/reward tradeoff. If you buy deep out-of-the-money options, you might have a 5% chance of profitability, but expected return of $0 (neither positive nor negative). 95% of the time you lose $X, and 5% of the time you make $19X. If traders are pursuing riskier strategies, you'd expect most of them to lose money.

There is more to trading than predicting the direction of a stock/currency. You can provide liquidity and arbitrage a stock and its derivatives. Having traded for a while, arbitrage opportunities do exist; though sometimes you might have to be patient and cut off trading until an opportunity arise. This can be quite a time (like a year with no trading opportunity) and will require a lot of self-control.