When I get invited to attend or speak at seminars and conferences on markets, technical analysis, and how to teach yourself trading, I am invariably dismayed by the sea of male faces. Not necessarily pale and grey, just an awful lot of blokes.
Drop into any City trading room and you’ll probably find that today men outnumber women by between three to one or even ten to one. How did we get to this point? Because I remember when I started trading financial futures we were equally split between graduates and non-graduates, boys and girls – and the latter were most certainly not confined to decorative or touchy-feely roles.
Last year research carried out by Paul Modley, client partner and head of diversity at Alexander Mann Solutions, found that despite the usual stereotypes, women made the better traders, outperforming the male cohort by 34 per cent. Three hundred and fifty new graduates spent four weeks in a simulated trading environment organised by Trading Hub.
Their conclusions were simple and credible. First of all men took bigger risks and were 30 per cent more likely to do so which, over time, resulted in bigger losses. Cautious females lost less dosh. So much for swagger and bravado.
Secondly the gals stuck to the rules while the chaps were 2.5 times as likely to break these, even if only marginally, like booking late trades and busting limits. This sloppiness, if avoided, made for more measured decisions and a higher chance of a profitable trade.
Finally they traded less, an average of 69 different positions versus 94 during their time at the firm, and used less capital; needless to say this enhanced percentage returns. As they say, ‘less is more’.
Paul has worked in the talent acquisition sector for over 20 years in a variety of roles in agency, executive search and in-house. In 2012 he was awarded a British Empire Medal in the Queen’s New Year’s Honours for services to the London 2012 Olympic & Paralympic Games.