There remains a concerted effort to increase equality and reduce gender gaps in industries across the globe, although this appears to be largely absent in the financial services space.
According to data from 2018, not only are women misrepresented at all levels of the global financial system, but females currently make up less than 2% of financial institutions.
We’ll explore this further below, while asking precisely how an increase in female traders (particularly in the forex market) would benefit the marketplace?
Appraising the Trends – Women Prefer the Forex Market
According to the current market trends, female traders are more likely to choose forex over any other niche.
Interestingly, they’re more inclined to invest through day trading and contracts for difference (CFDs), both of which are synonymous with the forex market thanks to its inherently volatile and derivative nature.
Although only women only account for around 10% of the online trading market in the UK, those that do participate are heavily involved in fields such as day trading.
This is an interesting consideration, not least because day trading derivatives are considered to be a high-risk pastime. The reason for this is simple; as they encourage investors to target volatility in currency pairings and attempt to generate a profit even in a depreciating market.
At the same time, studies have revealed female traders to be considerably more risk-averse than their male counterparts, while they also tend to admit when they require more knowledge and data before executing orders.
Do Women Make for Better Traders?
Despite their relatively low levels of representation, there’s statistical evidence that they’re more profitable than men on average.
According to statistical evidence gathered and analysed by Warwick Business School, female traders actually outperform men by 1.8%, which has led to senior figures like Bank of England Governor Mark Carney to surmise that the relative absence of women in investment represents a huge missed opportunity.
In high-risk and volatile markets such as the foreign exchange, the thoughtful and risk-averse approach of women could certainly help to reduce crash events and underpin more effective long-term strategies.
Females are also less likely to over-trade and better equipped for handling losses, ensuring that they’re well-placed to avoid the pitfalls of emotive trading and minimise losses over time.
How do we Entice More Women Into Trading?
While it’s inarguable that female traders add huge value to the world’s financial markets, the question that remains is how can more women be encouraged into a trading career?
Online brokerage platforms are certainly doing their bit to achieve this objective, by offering real-time access to multiple markets and providing no deposit bonus forex accounts to new registrants.
Through this type of offer, new female clients can launch their career with free trading funds, without the need to make an initial deposit.
Alongside so-called “demo accounts” (which offer access to a simulated marketplace in real-time), this should encourage even the most risk-averse and aspiring female traders to try their hand at day trading in the UK.
This, combined with a widespread national approach to encourage female traders and further understand the core advantages that they offer, could finally see women realise their full potential in the forex market and similar entities.