de | cn | ru

Market News

Are women better traders?

 The age-old gender inequality is not going away fast, despite the deliberate attempts to make companies give equal pay and the requirements that an X number of women sit on the company board.

 

The financial sector is one fine example of gender inequality in terms of numbers, at least. Probably in  terms of pay, as well. It is a known fact that men far outnumber women as institutional traders – a study from 2012 found that in the UK and US the trading desks are 95% male and 5% female on average.

 

The story with retail traders is pretty much the same – most retail traders are men, though there too the numbers are changing. For example, trading website FinTrader, quoted by StocksToTrade.com, says that now 25% of its traders are women, up from none about 20 years ago. A large US internet brokerage firm said that in 1999 barely 12% of its clients were women. Next year the number rose to 19%. So it seems that things are slowly changing.

 

Yet, who makes a better trader – men or women? There is plenty of data supporting either side, but we will start with the ladies.

 

Lex van Dam, a former Goldman Sachs trader and a host of the BBC series, Million Dollar Traders, has told Forbes that “Women have a much higher sense of risk control than men and it can help avoid many of the disasters that risk taking by a male dominated trading environment has caused over the years.”

 

His claim is supported by studies, showing just that. There is, for example, the research done by Financial Skills, a trading profiling company, that suggests that women are far better than men. “We found that men take more risk than women,” said Financial Skills COO David Hesketh, quoted by the site Efinancialcareers. “That would be fine if they also made more money – but they don’t.”

 

Besides, women are more inclined to admit a loss and cut it, while men hatе to admit they are wrong and this often ends in much bigger losses. Or as StocksToTrade aptly puts it “Women can say “No” more easily than men. Sometimes the best trades are those that are not taken”.

 

There is also the fact that women are more inclined to think carefully, “read the manual” first and ask questions, if they don't understand something, while men are prone to jump in head first. Women are more strict and tend to adhere to a strategy more so than men and this also makes them better traders.

 

Now, there is another popular claim, that can be somewhat contentious: women are better in a crisis and handle their emotions better and female traders are less likely to panic. The jury is out on this one – it is known that women are generally more emotional than men.

 

Financial Skills' study has also found that men were not only less profitable than women, but also placed higher volume of trades, thus generating higher brokerage fees and settlement costs. “Interestingly, the women also traded fewer times than the men.  In a world where every cost matters, reducing a bank’s brokerage costs would be a helpful contribution,” said Hesketh. “The data suggests that if you choose to employ men over women, you will make less money using more capital, you will have higher transaction costs and you will need a more robust risk and compliance team,” says Hesketh.

 

Last, but not least: statistics also are in favor of women. A study by the University of California of 35,000 brokerage accounts found that women make higher returns than men, by an average of 1.5%.

 

TAGS: women  traders 
Broker Country Regulation Platform Min Deposit Review
US CFTC, NFA MT4, Web,
in-house
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, IFSC MT4, MT5, Web $10 Review Website
Cyprus, Australia CySec, ASIC MT4, Web,
Mobile app
$100 Review Website
Australia ASIC MT4, MT5,
IRESSTrader
$100 Review Website
UK, Cyprus, Australia FCA, CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia FCA, ASIC MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
Australia ASIC MT4, MT5 $100 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website

More Forex Market News

AFM also plans to make ESMA’s product intervention measures permanent

Apr 18 2019 13:13:32

  The Dutch financial regulator AFM announced its plans to make the product intervention measures of the European Securities and Markets Authority (ESMA) permanent. Read more

BaFin joins FCA and other regulators in warning against Wise Banc

Apr 17 2019 17:15:37

  Germany’s federal financial supervisory authority (BaFin) warned against Wise Banc and ordered it to cease offering cross-border proprietary trading services to German investors.   A brief review of the broker’s website (www.wisebanc. Read more

FCA updates its warning list with CryptoExp, CapitalXP, and 4XFX

Apr 16 2019 14:44:31

  The Financial Conduct Authority (FCA) has recently updated its warning list with unregulated brokers CryptoExp, CapitalXP, and 4XFX. According to the regulator, these brokers have been providing financial services or products in the UK without its authorization. Read more

CySEC warns CryptoCapitalFX is a clone

Apr 12 2019 14:36:41

  The Cyprus Securities and Exchange Commission (‘CySEC’) officially warned investors that CryptoCapitalFX (operating via www. cryptocapitalfx.com) is not licensed to provide investment services in the country. Read more

ASIC warns that some Australian brokers are soliciting European clients

Apr 11 2019 14:31:20

  The Australian Securities and Investments Commission (ASIC) made an official statement, warning local forex brokerages to be careful not to break any overseas laws while offering OTC derivatives to retail investors in Europe and other overseas jurisdictions. Read more

Spain’s CNMV updates its warning list with a bunch of shady brokers

Apr 10 2019 17:36:00

  The Comision Nacional del Mercado de Valores (CNMV) has updated its warning list with BrokerYard, Capital245, CryptoEU, Pepperdyne, and UproFX, among others, earlier this week. Read more

UK’s FCA blacklisted unregulated broker Hope Area

Apr 09 2019 09:50:06

  UK’s financial markets and services regulator, the Financial Conduct Authority (FCA), blacklisted unregulated forex and binary options broker Hope Area on Monday.   “This firm is not authorised by us and is targeting people in the UK. Read more

Austrian financial regulator blacklisted EZCryptoplace and TradeToro

Apr 05 2019 13:36:59

  The Austrian Financial Market Authority (FMA) blacklisted unregulated brokers EZCryptoplace and TradeToro earlier this week. Read more

Belgium’s FSMA updates its crypto warning list with Bears Markets and several other brands

Apr 04 2019 16:17:51

  The Belgian Financial Services and Markets Authority (FSMA) issued an official notice on Tuesday, warning the public against www.bearsmarkets.com, and several others unregulated websites. Read more

London Capital Trade, Grand Fx Pro, and CfdPremium end up on CONSOB’s warning list

Apr 03 2019 14:15:22

  Unregulated forex brokers London Capital Trade, Grand Fx Pro, and CfdPremium have been the latest additions to the warning list of the Commissione Nazionale per le Societa e la Borsa (CONSOB). Read more

de | cn | ru