“There she is, that beautiful blonde from Wharton”, you say to your colleague as she comes in. She looks amazing and smells great despite being the only female in thepit. Yet she has a character of class, trades gracefully, and a strong resilience. After some time of trapping flies with your mouth, you stop gawking as your colleague leans over and says, “…not only is she like a nine, I’ve heard she’s the best trader at her firm!” You give a sudden and noticed, “What?” Its true, research shows in fact that females are better at trading than males but now a famous London manager prefers them and a renowned Forex trader gives her insights as to why…
Lex Van Dam, a former trader, Partner at Hampstead Capital HF, and notably from the BBC series Million Dollar Traders bluntly puts it,
...females tend to be statistically better traders than males.”
Where does he come off saying this? Two reasons…
1. Single men can be very overconfident in their ability, “…in areas such as finance, males are more overconfident than females.”
2. Women trade less frequently, 45% less yielding a gain of +.93% return over men.
Van Dam goes on to say that, “…there is no difference between the analytical ability of male and female traders.” He also thinks that in ten years there will be many more female traders on WS given the past financial crises.
What do you think the implications of a co-ed trading industry would be?
ForexDiva, Kiana Danial supports Van Dam’s reasoning saying that females have the unique talent of multi-tasking while waiting for trades to materialize. They also admit mistakes easier and don’t have an -male complex as she says,
...most of the losses in Forex trading come after huge success.”
She goes on to cite two studies, to support her own statements that females are more risk averse and that female overall investment performance is superior to males.
1. A New York Times article titled, How Men’s Overconfidence Hurts Them As Investors gives a summary of a few different studies on why females are more risk-averse.
2. According to a Vanguard Investment Counseling and Research study of 100K portfolios, females outperformed males by 7% in the period from 2008 to 2009.
For a further scientific explanation read, Women Make Better Investors Than Men, But Why?
Women, do you feel you have any other natural advantages that men do not?
Does any of this sound familiar? It should. Chabo11 posted on May 16th , Are Women Traders Better Than Men on a Time magazine article by Gary Belsky who cited a Quarterly Journal of Economics piece by Brad M. Barber and Terrance Odean from 2001. Coincidently, the supporting claims I used in Van Dam’s reasoning were pulled from that same study. Also, counter to chabo11’s perspective, I’ve vindicated reasons number one and five of their claims. However, I must confess that I did find all of this ex ante of their post and to conclude, my last question is men, what's your opinion on all of this? If you disagree, then let's hear it!