Study Shows That Hormones May Make Women Better Traders

Finally. Our hormones are actually doing something useful. I feel like they never get any positive recognition. According to John Coates, a senior researcher in neuroscience and finance at the University of Cambridge, the trading world would be better off with more female traders. His reasoning? Hormones may make women better traders.

Coates took saliva samples of 250 floor traders (most of them young men) and they showed significant testosterone spikes after a winning trade. These testosterone spikes can actually lead to impaired judgment, risky behavior and ultimately poor trades. This research – part of a new field called neuroeconomics – attempts to explain how people manage risk and why they often make irrational decisions. So, those who previously thought that women may not possess the emotional grit to trade might want to think again.

According to another recent study by City Index, female traders are outperforming their male colleagues in spread betting and CFD trading platforms. Men are often said to be better but riskier traders because they are highly motivated by their natural instincts but this study shows that female traders’ tendencies to collaborate and focus on research are boosting their performance. It suggested that women’s ease in wanting to work with others and asking for help are areas that are more challenging for men.

Hopefully, this kind of research will help more young women get into trading and not be put off by the fact that 92% of your colleagues will be men, according to Topstep Trader. The Next Women Magazine also thinks more women may go into trading because their putting off marriage to focus on their careers. Trading has also become a lot more technologically advanced in the last few years allowing for a work-from-home flexibility. Additionally, trading happens 23 hours out of the day, making it easy to fit into a tight schedule.

Photo: Maksim Shmeljov/Shutterstock.com