Forex trading has traditionally been a very male-dominant industry. Prior to the information age, the forex market catered only to a narrow segment of society, such as professional traders, retail banks and brokers. However, the rise of online trading platforms over the past decade has had a democratizing effect on forex. As a result, the market is experiencing a greater influx of women than ever before.
While relatively few in numbers, women make excellent forex traders. They are able to demonstrate a broad range of skills and temperaments that lend very well to forex trading. Below we explore just five of these skills in demonstrating why women make great forex traders.
- Women tend to be more risk-averse than men.
Although this may seem like a potential drawback, risk-aversion is critical in forex trading. After all, the entire field of risk management teaches traders how to minimize and manage risks. Women appear to be more psychologically geared toward risk avoidance, which means they are more likely to trade conservatively and preserve their accounts. A “low risk” approach to forex trading may not earn you a fortune overnight, but it may make you a better, more consistent trader over time.
- Women flourish at multi-tasking.
When trading forex, you often have to manage multiple positions, track economic data, analyze charts and monitor other markets. Women thrive in this kind of multi-tasking environment, and according to several studies, are more collaborative than men.[1] This makes women particularly well suited to trading the multi-faceted forex market.
- Women have an easier time saying no.
Sometimes the best trade is the one you don’t make, regardless of what your peers are telling you. Women have an easier time staying measured in crisis situations and can simply say “No” much more easily than men, partly because they are less ego-driven. This also means they are more likely to stick to their strategy as opposed to jumping head first into a trade they know little or nothing about.
- Women are detail-oriented.
Attention to detail is a common trait among women, regardless of the task or situation. It’s very easy to see why attention to detail is important in forex trading. When analyzing a currency pair or other financial instrument, women can easily avoid trading outside of their self-imposed guidelines. Women are more likely to make checklists, follow instructions and ask for help when they need it. For these reasons, they have the ability to make informed trades.
- Women think long-term.
There’s a reason why there are so few women day traders. The act of buying and selling a security in a matter of seconds or hours carries with it an overwhelming set of risks that many women aren’t ready to assume. The idea of “beating the market” is probably much less appealing to women, who would rather make balanced trades using the skills and traits mentioned above to create a long-term plan for wealth creation.
Final Words
Not all women can become great traders and very few can ever claim to be as great as some of their male counterparts. However, on balance, women have a certain set of skills and attributes that would make them better prepared for the financial markets than men. There may also be social factors at play; given that society places more pressure on men to make money (and given that men typically associate success with money), women may feel less pressured to make risky trades that invariably lead to disaster.
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[1] Sarah Boesveld (December 3, 2013). “Men’s and women’s brains fundamentally different, study finds, one better at focusing, one better at multitasking.” National Post.
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