Like many activities spawned by the City, spread betting was once a male-only pastime. "Just over 12 years ago, the attendees at our seminars were 100% male" Sandy Jadega of City Index tells Lucy Warwick Ching in the FT. But that's no longer the case: "now that has dropped to about 70%".
And while they're still in the minority, it seems that women have a few tricks to teach men when it comes to racking up profits. According to IG index, on average they win twice as much, or lose half as much, as their male counterparts. Here are four possible reasons why.
First off, men hate to be wrong. And that's an expensive failing as a trader. The risk is you run losses for longer than you should. The correct approach is to follow a strategy, bet relatively little, and cash in losses quickly rather than stubbornly sticking with a duff trade.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Next, says James Hughes, market analyst at CMC markets, "female traders, contrary to popular belief, are far better at extracting the emotional side of trading from their decision making". That can make them quicker to take profits and less prone to run a trade in the blind hope that prices will recover.
Latest Videos FromMoneyWeek
Third, men are prone to learn by doing. Most men don't or won't read instruction manuals whether they are written for new TVs or spread betting simulators. Women on the other hand often do. And a little bit of homework and research can pay big dividends when it comes to investing. Men tend to like to experience the pitfalls whereas women will try and find out enough up front to be able to sidestep them.
Fourth, women tend to be more patient and will happily not trade if conditions are not right. For example, according to one study on forex and index trades, women held positions open for roughly 50% longer on average than men.
So, if you want to improve your spread betting technique, maybe it's time to think like a woman.
