Willing to Take the Risk
Contributed by Armi Matienzo
Men have dominated the day trading profession for years, but even as the number of women traders has steadily increased, the gender inequality is still very apparent in today’s trading and investing world.
My colleague Lauren Snedeker and I are the only female members of TradeGuider Systems International, a computer software company that provides analysis tools and methodology education for day traders. Our goal is to see if we can quickly learn how to day trade and get more women motivated to begin day trading by documenting our own learning process and thoughts in our blog.
Our idea was provoked by the content in TradeGuider’s customer database – recently I wanted to get an understanding of the company’s client base. It turned out that 97% of them were men.
I wanted to get a feel for why women would be put off by day trading. Lots of money can be made in this profession and I didn’t understand why it is always portrayed as such a male dominated world. After doing a little research, I found that many studies have shown that due to women’s psychological structure, we are sometimes turned off by the known risk factor involved. But since we are more cautious, that, in fact, makes us better at trading.
On average, men are three times more likely than women to risk losing all of their savings when investing or trading, according to a survey from National Savings, the birthplace of E-mini trading.
Also, according to a study conducted by the University of California of 35,000 brokerage accounts, on average, women make 1.5% higher returns than men and single women make 2.2% more than their single male counterparts.
Testing the Research
Richard Seegers, a professional hedge fund trader, organizes weekly webinars and educational events from the United Kingdom for TradeGuider. He offered to teach Lauren and I how to trade the Foreign Currency Market (FOREX) to prove we could trade as successfully as anybody.
We had no prior knowledge of how to day trade – and Richard says this made us perfect candidates. After beginning to mentor Lauren and I, he mentioned his idea to the members of his TradeGuider trading sessions, and other women wanted to join in. From that, Richard decided he would open a special ‘Ladies Trading Room’ dedicated to women.
He said, “Women are better traders than men. Men tend to be overconfident in their own abilities and make decisions too quickly based on fear and greed instead of following the rules. Since women are psychologically designed to be risk averse and tend to wait for better opportunities, I believe I can teach these young ladies to be expert traders in 6 months.”
So are women made to trade?
Preparing for Competition
Richard wanted to prove this theory and announced that he wants to conduct an internal trading competition in February between the men in his weekly trading sessions and the women in the Ladies Trading Room.
Lauren and I began our trading lessons and blog www.madetotrade.squarespace.com at the end of July, and after gaining members from the US, the UK, Australia, and a few other countries, September 1st was our first official session. Since then, the women meet online 3 times a week for an hour a day.
Lauren said, “When I think about the daunting task of learning to trade, my early lessons in golf come to mind. I can’t speak for all women, but in many cases, we are afraid to ask questions and the lack of exposure to trading… makes it doubly hard to break into an otherwise male dominated arena. Luckily Richard Seegers has just as much confidence in Armi and I that I know we will succeed. It is my hope that our experience can help women feel more comfortable getting into trading and asking questions without fear of reprisal or feeling stupid.”
On www.madetotrade.squarespace.com, you can read our personal stories, see our lesson notes, as well as view our opinions, comments on the lessons, and articles on women and day trading.
The trading competition is not until February, but Lauren, the other women in the Ladies Trading Room, and I are ready for the challenge. We intend to win and show other women, and men for that matter, that day trading is a profession anyone can master.
Men develop over time to be competitive by nature, whereas women develop to accept social norms. It’s somewhat twisted. Men won’t say it…but they feel threatened when women are just as good as they are in a so called “mans world”. In fact, for every 1.00 a man makes, women earn only 74 cents. Thankfully, times are changing. I think it’s excellent you have this group and I’m sure it will inspire more women to get involved in trading.
I really wasn’t aware that there are so few woman as day traders, I haven’t given it any thought. I guess because it is done from home it is somehow anonymous. I used to work on oil rigs where the 2% woman rate was very obvious… Thanks for creating this group, very encouraging! I would love to join.
I am woman, my brain was develop as man brain: I am mathematician and inventor, engineer. Happily I have full emotions of woman: I am cautious, hate risk, don’t like to stress myself. I don’t have adrenaline busts like most men have. What is that ??? That is perfect trader. My idea of trading is doing steadily around 10-15 %. With ratio gain/loss around 20 in this moment. That is what I call trading. I am stressful in that as most men can only dream about,I love trading because it is only me and market, no stupid male managers who dislike me if I am too good. I was sick in my profession with all those jealous men, they treat me terribly the more better then they I was. NOW I AM FREE…IT IS ONLY ME AND MARKET…ME AND Mathematics…..I LOVE IT !!!!.
The facts seem to speak for themselves in the statistics of women’s performance as presented in this article. Certainly, the upcoming competition will will go a long way toward proving the point.
From my own trading experience, I am aware of my tendency to risk more to the point of larger losses due to the male stubborn need to be “right”, than prudence would have dictated, and in fact, I have initiated a far more cautious and disciplined approach to trading to achieve a much higher gain/loss ratio. The down side is that my gains are slower to accumulate. Ah, if I could only have the best of both worlds.
I think there are more women trading than you think (Linda Raschke comes to mind). I have been trading for many years now. It doesn’t seem to me that trading is a gender specific thing. I believe it has more to do with personality/character traits than anything else (and some chance/happening upon the info/idea of it). Until more recently, as a percentage of the population, there weren’t even that many men trading (whether day trading or position trading). Almost anyone can trade if they’re taught to do it and follow directions (or find good trading methods on there own). Richard Dennis proved that with his Turtle Trading experiment which was conducted in 1983 (both men and women were included). This is a quote from the Turtle website: “The Turtles became the most famous experiment in trading history because over the next four years, they earned an aggregate sum of over $100 million dollars. Richard Dennis proved that with a simple set of rules, he could take people with little or no trading experience and make them excellent traders”. Larry Williams taught his daughter to trade and she is very successfull. Yes men and women view the markets and trading differently. I have worked with several men over the years and men seem to be more geared toward conguering the markets, becoming rich, or competing with something or everyone else (no news here :)). On the other hand I (and maybe other women too)was mainly interested in learning how the markets work, what is the best way to get in and out (read least drawdown/loss), and how to make a comfortable living, I really don’t want to conquer the markets or become a bazillionaire. In short, I guess I believe men and women have a way different way of looking at trading and I think a lot of times the hype turns women off.
F.W.I.W., I am 100,000% in favor of what you are trying to, and certainly will succeed in doing. Way to go, Ladies.