The Rise of Women Traders
Trading conjures up images of sharply dressed men, shouting at each other on the trading floor and then driving home in their luxury cars. However, times have changed. Open outcry and over-the-phone trading have been swept aside by electronic trading, and the rapid growth of easy-to-use online trading platforms has paved the way for a new group of traders to enter the market.
People who do not fit the traditional trader stereotype, such as women, young adults, and people from countries without major financial centers, are taking to the stage and becoming keen participants.
With reports of a lack of gender diversity plaguing the industry, it is evident that men are still dominating the arena. However, our Modern Trader Report has shown not only that women are breaking into Forex trading, but also how they have the potential to outperform their male counterparts in the long run.
Here are five examples of how women are delving into the world of Forex trading.
1. Women Favor Forex Over Other Trading Styles
Some studies have concluded that women are more risk-averse than men, and these trading types may be classed as higher risk than binary options and investing, for example.
This could explain why the proportion of women who prefer spread betting, investing, social trading, and binary options trading is higher than the proportion of men who prefer these trading styles. Overall, however, the distribution of preferred trading styles is quite similar between men and women, suggesting that women who are entering online trading are not adopting a significantly different approach to men.Preferred Online Trading Style by Gender See Appendix A for raw data
2. Women Prefer Well-Designed Forex Trading Platforms
The majority of women preferred UFX, a fully regulated broker based in Cyprus and regulated by the Cyprus Securities Exchange Commission (CySEC). One of the notable features of this and the other platforms in the top five preferred by women is that they are all very intuitive and user-friendly. They all provide access to Forex trading and CFDs and they offer a good degree of support.The Percentage of Male to Female Visitors by Brokerage Service See Appendix B for raw data
3. 42% of Women Classify Themselves as Experienced
It comes as no surprise that a higher proportion of women classify themselves as beginners as compared to men. That said, of the 26,000 traders questioned, a rather high 41.8% of women classed themselves as experienced, which shows that a significant number of women are already participating in trading the markets.Distribution of Traders that Classify Themselves as Experienced or Inexperienced
4. Women May be Better Traders
Whilst women tend to be more risk-averse, there is evidence to suggest that this more cautious approach to trading could deliver better results. According to one recent study by Lu, Swan and Westerholm, female stock traders were more prone to buying when markets were falling, losing out in the short term, but resulting in significant gains in the longer term, as they purchased stock when prices were low. This resulted in women returning as much as 43% on individual stocks, and 21.4% over a portfolio of 28 stocks. Men had more of a tendency to buy and sell assets quickly, and to trade in the opposite direction to women, resulting in overall losses.
In an observation made by Deaux and Farris in 1977, men were more likely to be overconfident when acting in an arena that is traditionally male-dominated. Numerous trading models predict that overconfidence is linked to excessive trading to the detriment of the trader, and studies have supported this theory. In Barber and Odean’s 2001 study, they concluded that aggressive trading strategies displayed by men led them to underperform in comparison to women.
The same principles apply to Forex trading, and if more women share their positive online trading results, then even more women are likely to sign up.
5. The Rise of Female Traders
Currently women account for just 10% of the UK online trading market. Of course, there is a long way to go before the gender gap is closed, however, we don’t have to look too far back in history to recall how women were all but absent from the markets. As brokers see the opportunity available for engaging female traders, they are likely to increasingly target this market, which will lead to continued growth for the sector.
Furthermore, there are signs that the industry is starting to take action against gender issues. Many leading hedge fund companies are actively seeking to recruit female traders, particularly targeting young women for fellowships and graduate schemes.
Although it is likely to take time for the balance to be redressed between men and women in trading, there are signs that there will be more increases in the female trading population, as they continue to be attracted by accessible online platforms.
If their trading skills do indeed result in them outperforming men, then these hobby traders could start a wave of new female hedge fund managers being recruited to the top positions too.
- Best Forex Brokers
- Best CFD Brokers
- Best Copy Trading Forex Brokers
- Best Zero Spread Brokers
- Best MetaTrader Brokers
- Best Brokers for Mac
- Compare the Best Forex Brokers
At BrokerNotes.co, our data-driven reviews of online brokers are based on our own extensive testing of each broker's products and services as well as the qualified observations of our expert editorial team. In conjunction with our sister site, ForexBrokers.com, we’ve published well over 100,000 words of research and collected thousands of data points across hundreds of variables. Our in-depth trading guides are created with the same rigorous, data-driven approach.
Our proprietary Trust Score rating system tracks data from over 100 regulatory jurisdictions to help forex traders understand the regulatory status of their forex broker and choose a broker that they can trust.
Our editorial team is led by Steven Hatzakis, an industry veteran with decades of experience and a deep understanding of the forex market. Our team conducts thorough testing on a wide range of brokers, platforms, products, technologies, third-party trading tools, and mobile apps. We also test for the availability of high-quality educational content, actionable market research resources, and the accessibility and capabilities of mobile platforms. All of our ratings and rankings are based on the collection and validation of thousands of data points and our in-depth product testing.
Part of our testing process involves in-depth research into commissions and fees. We dive into each broker’s trading costs, such as VIP rebates, inactivity fees, custody fees, bid/ask spreads (we always strive to determine the average spreads for each broker to better serve our readers), and a variety of other fee-based data points.
All websites and web-based platforms are tested using the latest version of the Google Chrome browser. Our Desktop PCs run Windows 11, and we use MacBook Pro laptops running the latest version of macOS to test trading on the go.
When testing mobile apps or mobile products, we test on both Apple and Android devices. For Apple, we test with the iPhone XS running iOS 16, and for Android we use the Samsung Galaxy S9+ and Samsung Galaxy S20 Ultra devices running Android OS 13.
All of the content on BrokerNotes.co is researched, fact-checked, and edited by members of our editorial team. Our ratings and rankings are driven by our independent data collection. We may use generative AI tools to assist in some of the rote aspects of our content production processes, but the substance of our content, as well as our opinions and evaluations are based on our extensive research and product testing. Read our Generative AI policy to learn more.
Our rigorous data validation process provides our readers with quality data they can trust. Click here to learn more about how we test.
Forex Risk Disclaimer
There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more about foreign exchange risk.