In a previous article for TraderPlanet, I noted that women generally make better traders than men. There hasn’t been an academic study on this topic because women traders are a distinct minority.
In the last decade, however, there has been an increasing amount of research on the neurophysiology of gender. In terms of mental processing, women’s brains are more permeable left to right, which means that functions found mostly on the right side of the brain, such as emotions and intuitions, play a larger role for women than men.
That said, unsuccessful male and female traders have a lot in common. Both tend to be unsystematic and rely primarily on intuition (gut feeling or guessing). They both underestimate the difficulty of trading and prefer to learn about it by trial and error.
Accordingly, unsuccessful male and female traders tend to trade live accounts despite poor results and are capable of losing a great deal of money in a short period of time.
Successful female traders, on the other hand, also tend to be less systematic and more intuitive than successful male traders. That said, they utilize their intuition much more efficiently than men do.
This is especially true if they have given birth, because childbirth changes the brain. The “mommy brain,” a term coined by Dr. Louann Brizendine, has increased vigilance, spatial memory, flexibility, adaptability, courage and efficiency. And these upgraded skills are channeled in very practical ways.
For example, female rats who have given birth are up to 5 times better at catching prey than unbred females. Mothers also become more protective and concerned about security, including financial security. This makes mothers much better risk managers than men.
That said, women relate to the market as though it were a person and they tend to personalize their experience with it. Women want a positive relationship with the market and they get emotionally wounded when the market treats them badly.
To achieve peak performance, therefore, women need to train themselves to depersonalize trading and experience more of the emotional detachment that men naturally have.
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