Men, we need to talk. There is a rumor circulating that women make better traders. The jury is still out, but only because there are so few women traders to study. In my 12 years as a day trading coach, less than 5% of my clients have been female.
In fact, one female client sought me out partly because her husband, also a trader, was losing badly and it was driving her crazy. He had already gone though the kid’s college fund and was madly chipping away at his IRA. Once the husband realized he needed help and hired me, she had no problem generating $2,000 a day in profits.
In other words, her issues were gender-related; just not her gender.
Yeah, I Knew That
A study done by Odean & Barber in 2001 showed that men have an overconfidence problem, especially when it comes to financial decision making. Oddly, men get the most overconfident in situations that have the least predictability (such as trading) and the confidence persists even when their objective results are poor!
How is it possible to be overconfident and losing at the same time?
The Corpus Egosum
I suspect that scientists will one day discover that men have an oblong organelle deep in the male brain that takes full and complete credit for any and all positive outcomes in the neighborhood. Moreover, men readily attribute predictability to these outcomes. Nassim Taleb’s Fooled by Randomness presents a detailed study of this male foible.
Godzilla Ate My Homework
Men are also more likely to rationalize failure and attribute it to external causes or Force Majeure. Freud called this tendency ‘deflection.’ How many of the prize-winning economists who sunk Long Term Capital Management ever admitted that they made a mistake?
No Small Olives
Like Freud, I believe that men have certain ‘security’ issues that are hidden from ourselves, but no doubt hidden in plain sight. When it comes to various performance metrics, including financial, men seem to need boundless reassurance and we get it by reframing reality to embellish the story.
Men, we need to talk.
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What do you think? Post a comment for Dr. Reid, a trading coach, below.
