There are currently very few women in securities trading compared to their male counterparts. Fortunately, that’s all changing. Women are taking more control of their investment decisions and are daring to enter the financial markets that have been known to be male-dominated. Pushing for change, certain companies such as Orbex and FX Street are recognising and raising the awareness of women in finance, and as a result, the path for women wishing to enter the field is widening.
There are still some misconceptions when it comes to women and finance, especially regarding why there aren’t many in the business to begin with.
Here are 6 most common myths about women and security trading.
1) Women don’t trade securities
The biggest myths regarding women in finance, generally come from the sentiment that trading, finance and wealth management are ‘not a woman thing’. Much like in science and technology, a discourse of women in finance as either traders or leaders is seldom acknowledged. As a result, we tend to assume that women both don’t take any interest or know anything about finance, and thus don’t trade.
The truth is, however, that women do trade. In fact, there are approximately 2% more women traders every year. This is a slow but steady trend that doesn’t show any signs of stopping. They are out there, albeit still in small numbers.
2) They don’t make money
Securities trading is risky. There is no holy grail to it, nor a magic formula, however there ways to analyse the markets and conduct trades based on those analyses. Women spend, on average, more time than men doing the analyses and acquiring the necessary education, which is often seen in their performance. All female investment clubs outperformed all male investment club by a staggering 5%.
3) Women aren’t interested in securities trading and finance
Since women are not that well represented in the securities trading industry and finance in general, it is often believed that this isn’t something women are interested in. In the previous years, the knowledge of the financial markets was constricted to Universities and specialised schools which were mostly attended by men. Nowadays however, the internet allows anyone to learn securities trading or finance which leads more and more women to be involved. In addition, with the female trading population rising by 2% annually, the myth that women aren’t interested in trading is not reflective of reality.
4) Only those who work for brokers or large financial institution trade
Contrary to the popular belief, many women who trade, especially in Forex, have made trading their full time job. They don’t necessarily work for large financial institutions, nor are formally trained financial professionals. There are many female traders who have learned the art of trading online, applied their knowledge and are successfully trading from the comfort of their home.
5) Most trade on luck or feeling
One of the main reasons women have a better track record in securities trading is their confidence levels. While men have been found to be more prone to making trades quicker and more frequently, women tend to study a lot more, seek information and think twice before trading. They are least likely to trade on gut feeling, which makes them less risk tolerant and less prone to overtrading.
6) They tend to do worse in crisis
Women are often thought to be emotional, while men are thought to be more rational. As a result, when it comes to crisis, it is often believed that women would panic more and make worse decisions, especially so in finance, resulting in all kinds of disastrous results. In reality, the financial business speaks of a different story.
In a study conducted by German Comdirect Bank and the DAB, a sample of about 500K portfolios found that during the 2007 and especially the crisis year of 2008, women on average did 4% - 6% better than men.
Although women are slowly making their way up the financial ladder, the movement is steady. The recent campaign launch by Orbex has gathered many supporters, such as FX Street, Forex Magnates, Invest Diva’s Kiana Danial, among many others, and shows keenness to support and encourage the rise of the female trader.
This market forecast is for general information only. It is not an investment advice or a solution to buy or sell securities.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.