When it comes to trading, the differences between men and women can be substantial. However, if the different traits are recognized in both sexes, they can be used to an advantage. But in order to use them to your advantage, it’s important to first of all learn what they are. Not to be stereotypical, but many of the strengths that male or female traders possess do follow certain patterns.
Many men tend to be a bit more aggressive in their day-to-day behaviors. In trading, this is a significant difference and it seems to affect the way men trade. This could be due to an overflowing sense of confidence that means they might charge into the market making trades that a woman might take more of a wait-and-see type of attitude. Is one better than the other? Of course not, but they are different. There are studies pointing out that men make up to 45% more trades than women. Whether good or bad, it is certainly significant, and especially if all of those extra trades result in profits! But unfortunately, more trades does not necessarily mean greater profits. It does mean that men are working a lot harder, more stressed out, racing around to grab trades but the bottom line can be the same as that of a female who is less aggressive. In fact, the increased number of trades due to overconfident traders can magnify the number of losses.
So what if men are trading more but also suffering a higher number of losses? According to studies, men can handle the extra risk that end in losses pretty well. The reasoning is simple. They’re going after that one big trade that’s going to put them into the big leagues; that will make their day. For them, it’s well worth a little extra risk for the chance of winning big.
Women have special qualities that color the way they trade. Compared to men, they might not take such blatant risks with the hopes of higher profits, but they are willing to take risks. Like men, they want to win but are not as aggressive with their trades. One factor that concerns women is protecting their principal. The amount they are willing to put into a trade should not deplete their principal if the deal goes sour. They might do this by trading smaller positions that use less of their portfolio. As opposed to men, they might enter into fewer trades, but those they do enter will be according to their specific trading style without deviation. Rather than trading on emotions or guts, they’ll go along with their tried-and-true trading plan.
In short, women use their wits to make well-placed moves that are smart. Less trades, but a fair amount of wins.
Differences in men and women? Of course. But does it matter? Not much. The difference in today’s traders is that it can be done anomonlyously online without ever knowing the gender. The days of sexual discrimination in the financial markets are something of the past.