A Woman’s World

Some say it’s a man’s world. And in the world of trading, this has long been the case. But this does not mean that men are better traders. Women have come a long way and proven – even though proof was never really needed – to be just as good, if not better, than men in many fields.

Trading is no exception to this. So, why haven’t we heard or seen many women trading on Wall Street or setting up their brokerage? The answer is not always simple. Or maybe it is.

Why Are Women Better?

While we know we don’t have to convince you of anything specific, there are some factors at play here that tip the balance in favor of the female gender. Check out these 5 reasons why women may be the better traders among us.

Multitasking: Juggling Tasks and Priorities

Have you ever completed – successfully – more than one task at the same? This feat requires some amount of brainpower and flexibility. Evidence – and some studies – seems to indicate that women need less time, and less effort, to juggle between tasks and prioritizing swiftly.

In other words, women can handle more stocks with tighter deadlines much better than their male counterparts.

Take-away: Women seem to be more efficient at juggling and switching between different positions.

The Ability To Prepare and the Willingness to Learn

Unfortunately, or perhaps, fortunately, a female trader knows she has to work harder in this industry due to her gender. And her open-minded approach to the learning curve, taking in new information, positive criticism, and utilizing it, means she is more attentive. Above all, this eagerness means that women will build a strong and informed style in trading. Whether it is through reading the news, checking out webinars, or taking a class, being an active student is important to be successful in trading. Conversely, men are often victims of their ego. Therefore, they will often make impulsive decisions and underestimate the preparation needed to enter the market.  Essentially, they are setting themselves up for a difficult path.

Takeaway: When you acknowledge your knowledge gaps, you become open to learning, and therefore acquire the skills you need to make successful trades.

Measuring Risk More Effectively

Of course, risk is a big part of trading. There is a risk to everything – from your choice of platform to the willingness to lose money. This is the essence of trade: dealing with risk. So, your ability to measure, evaluate, and absorb risk, is probably the most important quality that is needed in this industry. It is also one of the reasons why women are better at the game. They have a high capacity of restraint when it comes to taking unnecessary risks. In addition, it has something to do with an inherent – and ancestral – drive to survive and protect those around them. This makes them great risk managers; they are less likely to hold on to a bad trade due to their ego and less likely to make decisions based on how it impacts their ego. Instead, the decisions they make will tend to be more calculated. On the other hand, male counterparts are more inclined to take risky positions in a bid to show off. Physiologically, testosterone will lead men to enjoy the high of the unknown – and the endless possibilities. So, they may end up trading too much and being exposed to risks that get out of their control.

Takeaway: Be it a physiological trait, or remnants of an ancestral instinct, women are more careful when taking action.

The Importance of Role Models and Acceptance

Having a trading role model may not be an absolute necessity; however, women typically choose better-qualified people to learn from. This also stems from their willingness to accept feedback, and positive reinforcement. Reaching the top is still considered an unusual achievement. So, women work harder at getting better and invest a lot in their learning process. As a result, new women traders are turning out to be skilled competitors to watch. They would also make for solid role models for the new generation.

Takeaway: The ability to take in new things, grow, and transmit your know-how to the next generation in a positive manner is very important for traders.

Handling Stress, Crises, and Losses

Finally, last but not least: living in crisis mode. Even at the best of times,  trading is a stressful art. There is no doubt about that. During a crisis, this pressure is felt even more. While stress affects both genders, women have a more effective way of managing it. So, it is natural that when you cope better under pressure and can navigate through tough times, you have a more focused mind frame. Eventually, this ability gives you thicker skin to trade in difficult markets.

By way of a generalization, it can also be said that women have less toxic egos than men. Therefore, they are better equipped to calculate risk and accept or manage losses. Their approach can more often be an analytical one which will help them optimize their plan for the next trade. They are ready to learn and avoid repeating mistakes.

Conversely, men are likely to become defensive in the face of a loss. This is a consequence of seeing profit as a reflection of their capabilities. In other words, their approach would be more emotional, and there is a tendency to avenge losses – and quench the ego – by taking higher risks.

Takeaway: Women are less likely to panic during a crisis, and therefore have more discipline when it comes to adjusting their strategy.

Wrap-Up

There has been a lot of progress in terms of inclusion. However, women are still fighting for equality in the trading sphere. And at every milestone, women show just how strong they are. At the end of the day, whether you are already an expert trader, or a newbie, a woman or man, ensure that you stay up to date. Read the daily news, and stay open to learning new things.

Trading is a journey. While it may seem stressful at times, it can also be very rewarding. Be sure to take care of yourself and practice mindfulness to stay focused on your goals while managing risks better.