Babes are better traders: Yet men dominate the landscape

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.

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Posted in Finance, Markets, STA news, Technical Analysis, Trading, Trending
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2 comments on “Babes are better traders: Yet men dominate the landscape
  1. Anonymous says:

    That is very interesting, I have not heard it before, but the explanation make sense, certainly men’s testosterone must increase risk . Excellent article, thanks.

  2. Anonymous says:

    Around 10 years ago I gave a talk to a women’s club concerning “Women & Finance” – unfortunately I’ve mislaid many of my source notes, but I do remember that I was completely convinced that women made much better investors than men – I still have a note that, in the 12 months to May 2006, the average portfolio of a male investor grew by 11%, the FTSE All-Share grew by 13%, and the Average portfolio of a female investor grew by 17%.
    For anyone academically interested, there is a paper (which I haven’t re-checked) “Single Women and Risky Assets”, by Christiansen, Joensen & Rangvid, probably published by Aarhus University in 2006.
    Something that even Nicole might not know – it was proved that single men were more likely to be over-confident than married men.

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About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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