Calling All Lady Traders…..

I’m already in trouble now aren’t I?  It should be “female traders” right?  Perhaps “women traders?” Or maybe it is just “non-male gender traders.”  Hey, what do I know, I’m just a dumb guy.

In my life I am surrounded by a lot of great women; there’s my wife, daughter, God-daughter, mother, sister, mother-in-law, sisters-in-law, as well as a plethora of aunts, nieces, cousins, and just plain friends.

And even though I love them all to death, I would be lying if I said I totally understood them, and they would probably say the same thing about me.

Traditionally though, the one area that I haven’t seemed to run into as many women, is when it comes to trading.  Its been this way as far back as I can recall.  I even remember reading the Market Wizards books back in the late 80’s and thinking it was strange that Linda Bradford Rashcke was the only female interviewed.

I have often wondered if the reason for a lack of female traders had something to do with the innate differences between men and women.

Despite a lot of the pseudo-sociological theories that have been pushed in the last 40 years trying to show that men and women are the same, the fact is that they just aren’t. Men and women are (or should be) equal in terms of rights, opportunities, and importance, but they are not (and should not try to be) the same.

How big the differences between the sexes are has always been a hot debate.  A few years back there was a best-selling book called “Men Are from Mars, Women Are from Venus,” that tried to expound on that subject.  Personally I would never read a book like that, because from the title it assumes that men and women are actually from the same galaxy.

It’s these differences between men and women however that make each gender special. Each has their own strengths and their own weaknesses, and that is why when things are going well between us, we compliment each other.

These intergalactic differences are related mostly to the way in which men and women process information, and thus what each thinks is important when it comes to communicating and understanding issues and ideas.

Let me illustrate this with an example;

A guy leaves on a Thursday night, with six of his buddies, for a bachelor party in Vegas. When he returns on Sunday evening, his wife (or girlfriend) asks him….

“How was the party?”

To which he responds, “Great…..what’s for dinner?”

Now, his wife can go to the mall to do some shopping, run into a friend who she hasn’t seen for a couple of years, have a five-minute conversations with her, and then go home and spend 30 minutes telling her husband about it.

“So I ran into Cindy today, and she is still dating that guy Dave….you remember Dave, he is the one she meet when she was working over at the dress shop that had all those cute displays in the window……….”

Both ways of communicating are equally as valid….but not as far as the other sex is concerned.

The guy in this example is not trying to hide anything that he did in Vegas.  No, in fact in his mind he is being precisely truthful and forthcoming.

His “guy mind” is thinking (in a robotic way), “I-am-being-asked-a-question-regarding-the-events-this-weekend-and-I-am-giving-you-the-answer-in-a-direct-and-concise-way.”

This is because guys generally communicate in a very utilitarian and unidirectional way.  In this case the information is flowing from him to his wife, and in his mind there is no need for her to be involved in sending information back the other way.  Kinda the way a lot of guys view sex.

Women on the other hand view communication as a group activity where there is an ebb and flow of information between the participants.  In order to facilitate that process, they go into very deep details, not just about the main concept, but all the ancillary info as well.  It is a shared process and once again, not unlike the way women view sex.

Now even though this blog is often about the markets, let me give some “bonus advice” to any of you who are just married, soon to be married, or ever plan on getting married.  Trust me, it will save you years of headache when it comes to communicating with each other.

You will thank me later.

When the guy in our example answers the “Vegas question,” he thinks he has answered it completely and is done.  His wife on the other hand subconsciously thinks to herself…..”wait a minute, if I went to Vegas for a bachelorette party with my girlfriends, I would be going into great depth about it, not giving a one word answer.  I wonder why he is being so short? Maybe I need to try again.”

Thus she continues the questioning with, “so, who ended up going?”

Her husband’s brain now is starting to have some synapse misfires; it’s thinking …“this-is-strange-I-have-already-answered-the-question-in-full-about-the-weekend.  Does-not-compute.  Does-not-compute.  Will-try-again.”

“Just some of the guys,” he responds.

You know where this is going right?

She keeps seeing his short answers as evasive and continues pressing for more information.  He keeps seeing her questions as invasive and at some point starts to resent having to continue to respond to questions he thinks he has fully answered.  Eventually this process escalates into a full-blown argument and ends up with the husband knocking on the door of one of his buddies from the Vegas trip to see if the couch is available for the night.

The solution is for both sides is to be aware of the differences in communication styles and try to meet halfway; the husband trying to elaborate more, understanding he is not being “accused” of anything, and the wife dialing it back a bit, understanding that his limited answers are not a sign of wrong doing.

So back to the question of female traders.  Is it possible that because of the way women process information that the world of trading doesn’t appeal to them?  Actually, I would think that opposite would be true.

Women’s hunger for details and the give and take of ideas and information would seem to be a beneficial trait that would be an asset when dealing with both with the markets and with other traders.

The other reason it would seem that more traders should be women is that they much have less ego than men when it comes to financial issues.  They don’t measure their worth in terms of money as much as in terms of accomplishments.  This is that critical disconnect that allows the most successful poker players and traders to stick to their methodology instead of getting sidetracked by the dollar amounts they are dealing with.

So in the end I don’t think there is any mystery as to why there are not as many women traders as there should be.

Trading has traditionally been a world where you needed to find a mentor in order to have a chance to succeed.  That’s usually been hard enough for a male trader to do, let alone a woman trader, who runs the risk of having to deal with all the unwanted sexist crap that often comes with male/female relationships where the male has the position of power.

But thanks for the advent of online trading communities like StockTwits, I think women currently have a much fairer playing field and possibly their best opportunity ever to find mentors and get into trading.  And I will tell you a little secret……it’s already starting to happen.

I spend a lot of time DM’ing with traders during the week and you would be amazed at how many of them, after a few months of back and forth conversations have dropped the bomb on me that they are in fact female.  I’m not talking about just one or two here or there, but a significant number of ladies, of which some are the most active contributors to the streams.

These women are serious market participants, trading everything from equities, to forex, to options, to futures.

Along those lines, Lydia Idem’s blog FaithMightFX has just been added to the StockTwits Blog Network, which helps add to its female presence that already includes Raghee Horner’s Forex Off The Charts, Kristin Bentz’  The Talented Blonde,  The StockTwits Social Web Index Blog, curated by Brittany Pierpoint, and one-third of the trading team at High Chart Patterns Group.

In addition, there are hundreds of active female traders on the streams, and perhaps hundreds more who are hiding behind gender neutral anonymity.  Hopefully moving forward more will “come out” on the streams, which will in turn, encourage new women to try their hand at trading, and hopefully as they do, guys will treat them will the respect that they deserve.

And I have to admit, this is personal with me because one day in the future I would like the idea of trading to be as much of an option to my daughter as to my son.

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27 Responses

  1. Pingback: Women-Run Hedge Funds Ruled In 2012 - bclundbclund

  2. At this point in history we should all know women are different from men. I wrote a book on stocktrading for women “High Heeled Traders” and many women (in non-finance background) finally understand trading as I explain it in terms of shopping, fashion, and shoes. (Whatttt?!) I am grateful Brian that you raised the point of why not a lot of women are trading, I did say that in my book, it’s the way the concepts are communicated. So what better way to enlighten them with what they arleady understand? I also appreciate the comments here from men and women traders. I invite you and your readers to my website and get the free 100 page preview eBook.

  3. You say there is no difference between men and women, yet in Japan $USD/JPY and $TRY/JPY trading is a woman’s pastime. Hmmm. Here we see very few lady traders but there is “no difference between the sexes”. I am glad there is a difference between the sexes. If there was no difference btween sexes then we’d All be gay and no one would care if there were more or less lady traders. I mean we can’t all be gay can we? I want to know how many gay traders there are? Now there is a question that no one really needs an answer to. Unless you want an answer of course.

    • I don’t know how serious you’re being (I’m guessing not very ;)) but I never said that men and women are the same, I agree entirely with Brian that men and women are from separate galaxies – the differences between us are as vast as the expanses of space. They make life interesting. However, I don’t think that they make men or women more predisposed to trading.

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  5. Here in Japan, trading is a very popular pastime for the Japanese housewife.

    I certainly don’t think there’s any innate differences between men and women that make men more likely traders, more I think it’s simply cultural differences. As you say this is changing as trading is moving more and more into the public domain.

    There are quite a few stories online about the Japanese housewife traders, but here’s an interesting video: http://www.reuters.com/video/2011/03/30/japans-hedge-fund-housewives?videoId=199153009

  6. Brian, the gender disparity is not complicated. Men have a much greater tolerance for risk than women. So, not surprisingly, there are many more men drawn to risky pursuits such as race car driving, extreme sports – and trading. The gender preference for risk has been studied and documented ad nauseam.

    Btw, remember all those studies that show women are better traders? Note that all these studies show that the average trader loses money. Women, on average, lose less because they risk less. This doesn’t mean they are good traders, just less bad when they lose.

    Because men risk more, they occupy the long tails at both ends of the spectrum. Therefore you get the Victor Niederhoffers and John Meriwethers at the losing end, and the Ray Dalios, Buffetts, Jim Simons, etc at the winning end. Look at Bloomberg’s list of top hedge fund managers, and they are all men.
    http://www.bloomberg.com/news/2012-02-28/dalio-earned-clients-13-8-billion-to-lead-hedge-funds-as-paulson-slumped.html

    The other more controversial issue was once raised by Larry Summers, and led to him being sacked as Harvard President.

    • In Japan women don’t let men trade. “It’s too dangerous,” they say. “You might loose my money” they say. “You should have learned from your mother the way I did.” they say.

  7. Trader girls are everywhere .. perhaps the harder thing is being a west coast trader, not an east coast trader. Waking up in the black of night is the hard thing, I think.

  8. Unfortunately, female readers aren’t going to like my remarks – but it’s what I think. I am happy to be shown that I am wrong. My opinion is that the ladies are less playful. They can master games in which the instruction they receive will stay relevant – like sales, teaching or law for example. However, in games that are constantly changing, like IT or trading, their lower level of playfulness will be a handicap that will prevent them from adapting as quickly.

    • My goodness, what on Earth gives you that impression, Savalyn?

      If there is one real issue facing women’s ability to adapt to changing parameters it’s that women are more responsible for the welfare of their children than husbands are, as a general rule. So while men are able to stay at work longer and dedicate more time to career development outside of the workplace, as opposed to staying home when the kids are sick, or it’s a school holiday, or shopping for food and clothes, preparing meals, doing laundry, etc. women are not able to dedicate the same amount of time when they have children. Luckily for us, our larger brains and greater number of neural receptors make up for in quality where we lack quantity of time.

      It is not a “playfulness” issue, I assure you.

      I’m hard pressed to see how this applies to trading, though. While markets are fluid and dynamic, the rules of trading, patterns and levels that are used don’t change. While you may use traditional patterns more in a strongly trending market and harmonics more in a chopping market, the rules of stops, risk, etc. don’t change.

      Cheers

      • Larger brain you say? LOL I’m going to love the response this one gets when the ladies stop shopping, cooking, and doing the laundry just long enough to read this comment

      • Yes, it was a joke, Steve. I think it was the best way to illustrate the “playfulness” point.

        But back to a serious note: I think trading is a great fit for women because the flexibility of hours allows for raising children more so than more rigid professions.

  9. I believe there are many more women traders than you see being vocal. Women are generally dissuaded from participating in the social aspect because things like: “Did you see that broad on cnbc rolling her eyes? what is that, hormonal?”, “Good morning, Gentleman! Ready to trade?” I generally block anyone who uses the word, “broad.” there are many more but i don’t keep a little notebook of offensive, caveman behavior around.

  10. A lot of mentors believe in the need for mentors as much as bullfighters believe in a need for bullfighters I suppose but that’s another discussion.
    As for women in the marketplace it’s my theory that women make better investing decisions than men because they take less risk and men make better traders because they are prepared to take more risk so they are prepared to live close to the razors edge where they can adapt their fight or flight responses to capture gains and cut loses.

    The other day while talking to my wife about the “sexes” (right before my male pattern deafness kicked in) she said that if men want to know what women are thinking all they have to do is ask and then be prepared to listen for about 5 hours. I’m thinking this one is going to remain a mystery because around minute 5 of listening to my wife go on about something I find myself staring at her breasts.

    Where was I? Oh yes…stereotyping is bad. Hang on was that what I was saying? I said breasts and lost my train of thoughts. Oh well

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  12. Thanks for bringing up the topic. A couple of years ago I did the rounds in the prop desks in town. As a 40 year old over educated professional considering a career shift I was amused and taken aback to find that nearly all of my peers would have been men under 25. One prop stock yard had 103 traders, exactly 2 of them young women. I thought it best not to be surrounded by people lacking fully developed frontal lobes so have continued on my own (with an air gap to start two non-trading companies). I hope you are right about mentorship because the first companies to figure out that women are a way under-exploited talent pool will win.

    And it is about the money in so far as the account reveals success or failure in as brutal a fashion as possible. The beauty for women is that the market doesn’t give a damn about who they are.

    I want to win and I want to grow my portfolio–in the past 12 months I’ve blown away every expectation I had and I feel great about that. But it is still hard to see this as accomplishment in the big scheme of things because, you know, it is only money. In this way trading feels more like being a poker player or professional gamer.

  13. we call them “She-Trader”

    a couple of years ago we wrote a short study about them, but unfortunately in Italy we are used to talk a strange sum of sounds quite different from plain English ;))

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