EDITOR'S TAKE: Why women and old men can't trade

15 January 2009

2 minute read

EDITOR'S TAKE: Why women and old men can't trade

In last Monday's inaugural episode of the BBC's make me a trader programme, conceived undoubtedly in the olden days when trading was a glamourous career rather than one whose practitioners live in daily fear for their survival, two things were amply clear: the woman and the older man were rubbish.

Out of eight would-be traders, only two were female and one of them sobbed for a full 90 minutes and was too neurotic to place a trade.

Meanwhile, the oldest wannabe - a 63 year old ex-IBM man - placed a buy order when he meant to sell and then bought into Bradford & Bingley on the cusp of its demise.

In one 60 minute programme, the BBC therefore illustrated a) why one London trading floor apparently has three women and two hundred men and b) why most traders retire before they're 40.

The notion that young men do it best is backed up by research from Cambridge University showing links between testosterone and success in high frequency trading. With the possible exception of bearded women and Rupert Murdoch, testosterone is highest in 20-something males.

"Testosterone peaks at the age of 21 and drops over the course of your life. In your 40s it literally falls off a cliff," says John Coates, the former Deutsche Bank trader leading the research.

Coates' widely publicized research shows successful traders have often been exposed to high levels of testosterone in the womb.

Exposure can be measured by comparing the lengths of the index and ring fingers on your right hand: if they're roughly similar, you were born to be a day trader. "It's hard to measure by sight - you're best off photocopying your right hand and using a ruler," Coates advises.

A more conspicuous indicator of current testosterone levels may well be acne. In the BBC's programme, the 30-something man and "successful [hedge] fund manager" managing the novice team had a large boil on his cheek.

Masculine names may also be relevant - the 'top City trader' and former Goldman director stumping up the cash for the novices to work with is called 'Lex Van Dam.' Laura Smith doesn't sound quite the same.

AUTHORSarah Butcher

Global Editor

ch
christianald
20 January 2009
Look, the old guy was the first to go last night - he even admitted that it wasn't working for him, so where's the shame it that? He started badly, and went from one error/mistake/bad decision to the next. HE HAD TO GO! It's all very well for Sarah to make these stereotypes about gender, but they simply don't stand up to the evidence. So far, A WOMAN (yeah re-read that bit), is the best performer in the group. I'm putting my money on the shopkeeper or that hysterical girl to go next.
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dd
dd
19 January 2009
pc stances aside, on average the stats are pretty clear and the pnls are pretty clear. no shame to sarah in stating it.
one key exception sub-group is "very good" traders, who tend to be able to keep on keeping on into "later" life. (those who haven't retired.)
they also tend to be calm, thoughtful, non-aggressive types.
but they are not the norm, outside hedgefunds.
the amusing thing about people claiming that "sexism" prevents women traders succeeding is that it's one of the most meritocratic professions on earth: you live and die by your pnl. i've only come across a few top-quality female traders, but they're all doing VERY well for themselves.
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ja
jambai
16 January 2009
lola,the solution is simple.women start your own companies then you cannot complain about sexism
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Ph
Phoenix2009
15 January 2009
trying to establish a correlation between testosterone and skills in trading is just superficial really..almost as much as the relationship between the relative size of your fingers and your potential sucess in trading.
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KI
KINGPIN
15 January 2009
JIM SIMONS, ALAN HOWARD, AND THE MIGHT PAULSON (NOT HANK!) ........NUFF SAID!!!!
THE BEST TRADERS DON'T NEED TESTOSTERONE AS MUCH AS A LIGHTNING QUICK BRAIN AND GOOD FORESIGHT........TESTOSTERONE BY DEFINITION WOULD BLOCK THE FULL MAXIMISATION OF THESE TWO QUALITIES.........
ANYWAY, THE MIGHTY EDITOR SARAH HAS BLATANTLY WRITTEN THIS TO PROVOKE HEATED DISCOURSE! WOO HOO!!!
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