Sex and Trading

Sex and Trading

Well… now that I’ve got your attention! Nothing seems to capture our interest as much as the mention of sex.

Let’s have a look at how individuals from each gender are likely to trade and the challenges they are probably going to face at some stage during their trading career.

Based on statistical research of over 35,000 households, women make more cautious and conservative traders, yet lack confidence in their own abilities and worry that trading may be a male domain. Men tend to over-trade and display over-confidence, and treat the sharemarket as an opponent that they need to conquer. Become aware of your own behaviour and you’re more likely to beat your own biology and become a super-trader!

The Brain

Much of our behaviour as men and women is derived from the goal to reproduce. It is quite likely that this phenomenon extends to the trading arena.

Women’s ACC (anterior cingulated cortex) is larger than a man’s. This region is primarily responsible for risk evaluation and fretting over choices. In life, it may lead to questions such as: “Is this hunk fatherhood material for my potential children, or is he just spunky eye candy?” In the share trading arena, despite statistically outperforming men, women will worry over a particular strategy or trade more than a man because this region is more easily activated.

Also, women’s prefrontal cortex is larger in comparison to a man’s. This area, amongst other things, is the part that stops her from making a fool of herself in public. (Yes… I know girls… this explains a lot of things about our spouses, doesn’t it). In relation to trading, the threat of public ridicule can be a scary prospect, especially if in a trading group or trading with a human broker, so some women drop the whole idea of trading before they commence due to this fear. A woman’s hippocampus is also highly developed which helps her to retain and replay every detail and humiliating event such as a trade that has ended badly, long after a male’s hippocampus has managed to forget the names of his own children. The insula is the area of the brain responsible for processing gut reactions. A woman’s insula is larger than a man’s and can lead to a disregard for the facts or the chart, which may be suggesting contrary information. These differences in the structure of the brain have meant that it is often the woman who is responsible for putting on the brakes during an intimate encounter. They also help explain why women make more cautious traders. 

Effective trading relies on a high level of self-awareness. To know about the strengths and limitations of your gender will stand you in good stead to improve your trading results. Men, conquer your egos, admit when you’re wrong, apply caution where necessary and realise that to trade well will take a while to master. Women, develop some confidence by pursuing your own trading education, recognise that you can be profitable as a trader, and be prepared to dive into the arena even if you’re feeling a bit scared about it. The rewards are worth it.

Louise Bedford (www.tradingsecrets.com.au) provides a free trading plan template on her website. She is a full-time private trader and author of The Secret of Writing Options, The Secret of Candlestick Charting, Charting Secrets and Trading Secrets.