To argue that women are more successful traders compared to men is a never-ending battle because there are plenty of men out there who have proven very successful in trading over time. So we won’t go any deeper in to that argument, since men and woman have very different styles. The one thing that remains constant is that traders are a special breed!
Women are more prevalent in financial markets now than ever before. As little as 15 years ago they were almost non-existent in the male dominated field of trading. Women started by entering into the trading spaces as trainees and assistants just as men did.
During the 1980’s and early 1990’s, trading was a bit of an unregulated environment – traders say what they want to say and if you didn’t like it, you’re free to go. If you can’t deal with it, then you’re fired. Because of that, it was a difficult field to work in for some people, particularly women.
However there were some strong women who really survived and proved they belonged, handling the situation and becoming solid team members. As the years passed, there were changes made on the trading floor. Business rules and regulations were being set to maintain order. With this, more women became interested in the opportunity. Over time, they proved themselves to be as capable as men.
Findings in recent surveys show that women are more patient than men. It seems that women are more likely to consider the risks, avoid rash investment decisions and possess better long term vision. They manage their emotions better than their male counterparts. In an investment banking intern trading simulation exercise, the women interns lost less money than men. Side note – interns always lose money so losing less is an accomplishment! The studies suggest that men and women trade differently.
Some men can suffer from impatience, greed, excessive confidence and ego. They were more prone to trade with their ‘gut’ and more likely to go over their trading limits. Traders, both male and female, trade in different styles, approaches, and risks. Large risk takers show big profit and also lose big money.
Nowadays, countless women are already in key positions of financial markets, though the prevailing interpretation is that men still dominate the capital markets.
Qualities such as patience, care and long-term vision are the reasons why women can and will become better investors. With such patience, they become better at considering risks and investments and, of course, at avoiding rash investment decisions.
According to research held by the University of Berkeley, it has confirmed these claims and found out that men become over-confident and in doing so they tend to take more trades, causing substantial decrease of their annual returns.
While male traders tend to use their ‘gut’ rather than their head, female traders tend to carefully manage emotions and act more professionally. Men will certainly put their ego first and sometimes they will fight market trends unnecessarily just on principle. Women cultivate and maintain positions and they will give them extra attention. Also, many women are well known to be risk avoiders, and so they carefully consider their steps before placing their trades.