At a recent Toronto MoneyShow, an elderly couple approached me at our kiosk asking “What is The Stock Whisperer?” I told the couple that I’m The Stock whisperer and that I teach people how to trade in the stock market.
The husband shrugged his shoulders, leaned in so that nobody else could hear except his wife and told me that he could use some help because he wasn’t doing such a great job of it.
At that moment, I turned to his wife and asked her if she did any trading. Her eyes opened very wide as she defensively announced, “No that would be crazy. My husband handles all of that stuff”.
At that point I couldn’t control myself. I told her that he wasn’t’ handling that stuff too well. She needs to help him out. She explained that she didn’t know anything about the market, but if I could do it, maybe she could too. Her eyes started to twinkle with this new perspective. They shook my hand, thanked me as they picked up two of my brochures and put them into their canvass bags.
I told them I was going to be doing a free presentation on my 93% success rate trading oil and gold using the dark pool later in the afternoon. They told me that they would be sure to attend it.
I couldn’t blame this elderly woman for being unknowledgeable when it came to trading, after all how many women in this world are trained to be a trader? This lack of enthusiasm to learn about the stock market stems from our childhood.
My parents didn’t tell me that I should be a trader when I grow up. I’m sure I’m not the only female out there that didn’t get pushed to go into finance, business, or trading. Most women from my generation were told to be a school teacher, a nurse, or in my case, try to find a nice rich husband to take care of you. That didn’t work out too well.
Why didn’t my parents or your parents tell us that we should be a trader? It wasn’t the popular career choice of women at that time. The financial field was completely dominated by men wearing Armani suits. There have only been a handful of women that have worked on wall street in my generation.
In 1967 Muriel Siebert was the first woman to own a seat on the New York Stock Exchange among 1365 males. She was also the first woman to head one of the NYSE’s member firms. If there were more women doing that in the 1960’s perhaps our parents would have suggested that we do it as well.
We all know that there are different gender qualities between men and women, but what most women don’t know is that they possess great attributes genetically for success as a trader. The most important characteristic they genetically possess is having great discipline and being able to follow rules.
These are key components that traders need to possess. In a study by the Journal of educational Psychology Adolescent girls were found to have 5-20% more self-control than adolescent boys, explaining in part why they achieve higher grades and do better than boys in school. However, studies have shown that boys tend to do better on test taking. It’s the good behavior that earned these girl’s better grades.
Women have also been shown to be better with money management and to take less risks compared to men. (Berkley study BOYS WILL BE BOYS: GENDER, OVERCONFIDENCE, AND COMMON STOCK INVESTMENT* BRAD M. BARBER AND TERRANCE ODEAN)
It’s imperative for long term success as a trader to be able to calculate risk/rewards management.
Most women don’t have that ego macho mechanism that is so prevalent amongst males. The ego can make traders hold onto losing trades or take higher risk positions.
Over the past 2 decades, I’ve personally observed how traders with big egos have destroyed their trading accounts. My motto has always been slow and steady wins the race.
Men and women tend to approach debt in their own ways, too.
Men tend to accumulate more debt than women and default on mortgages more often, while more females seek out help for debt problems than males. (Janna Herron Bankrate.com)
In preparation for this article, I wanted to do a gender trading challenge between 3 women and 3 men from my live trading room. I made sure that both genders had the same years of experience to keep the challenge even. Their experience varied from one to five years as a trader.
This was a two-hour day trading challenge where these traders could trade anything that they wanted. They could trade stocks, futures, options, or forex. They had to privately send me their trades, so that nobody could copy them.
I told the traders this wasn’t about money. It was as trading challenge on gender and discipline amongst traders with various years’ of experience trading.
I gave the traders a choice of whether they wanted to trade with real money or paper money.
They needed to exit out of their trades at 11:30am if their trade was against them.
Here were the results:
Female trader #1 (5 years’ experience) Traded with real money and made the most real money during this challenge. She made $428 real money. She did 9 trades, but scaled out creating 13 ticket charges. She had 10 winning trades and 3 losing trades. She kept her losses small.
Female trader #2 (2 years’ experience) Traded with real money and paper money. Her trades that were paper she gave less risk to, trading smaller share size, whereas the trades she did with real money were bigger share sized positions. She did 3 trades. She lost $15 on paper She made $55 real money.
Female trader #3 (1 years’ experience) Started with real money but after having a small loss switched to paper trading stating that she was undecided about the market direction. She did 3 trades. She made $27 trading with real money on her first 2 trades. One of those trades was a winning trade and the 2nd one she lost but kept her loss very small. She changed her mind and decided to do real money on her next trade and made $15. She made $42 real money.
*All 3 of these female traders have taken my Boot camp live trading class.
**Our 1st male trader with 5 years’ experience canceled out of this challenge one hour prior to the start. We were fortunate to find another one quickly. He was nominated by a few of the female traders in the room.
Male trader #1 (5 years’ experience) Traded with real money. He only did one trade. He added onto his trade that was going against him and ended up flat on the trade.
Male trader #2 (2 years’ experience) Traded with paper. Did two trades. He made the most money on paper ($17,000) He stated that this was a bad day for doing this trading challenge because he had a lot of real trades. After exiting this trade that made him $17,000 on paper, he saw that it was still going up, said he was too early on his exit, and he entered the trade again.
He didn’t adhere to the rules, and held the trade against him after the 11:30am deadline. He ended up scratching on the 2nd trade.
He risked $13,650 of paper money on this options trade. He stated that this is not a normal trade for him, that it is a paper trade designed to either have a very high rate of return or lose big. He also stated that he has done this many times before with real money.
He was the only trader who asked me when he would know who won or how they did.
I never stated there would be a winner or that this was a competition
Male trader #3 (1 years’ experience) Traded with both paper and real money. He made $450 on paper and $215 with real money. He did 6 trades and only lost on one trade where he acknowledged that he broke my #1 trading rule of not trading the 1st 10 minutes the market is opened. This is what we call the shake out period. He broke the rules on his paper trade but not on his real money trades. This male trader has taken my boot camp live trading class, whereas the other males have not taken it.
As you can see Male #2 with 2 years’ experience took the biggest risks in this challenge. Over the years, I’ve seen traders get wiped out taking high risks. The secret to success is to always keep your risk low. Many traders are not successful in the long run because they trade with a gambling mentality.
Male #3 with the least trading experience made the most real money in this challenge. However, keep in mind that this male took my Boot camp live trading class. This is a very intense class that is 5 hours a day for 2 weeks, all live trading. It focuses on discipline and only entering high probability trades. Male #1 added onto a trade that went against him. He was lucky and ended up flat on his trade but that is high risk trading. A good rule to follow is to only add onto positions that are showing you a profit.
All 3 women in this challenge kept their losses small, trading with discipline and practiced good money management. They didn’t do any high-risk trades. They didn’t add onto any trades going against them, and they followed the rules of the challenge.
Over the years, I’ve done many trading challenges with my students. This is the best way for me to help traders: Tweaking their entries and exits during live trading creates great habits and increases their confidence in themselves as a trader.
Unconditional robotic trading takes time to master. Many traders need to be rebooted from bad trading habits. They need to learn to follow rules and have a systemized way of trading. I teach my traders how to read the tape and follow the dark pool trades.
While gender does play a big part in trading, keep in mind that there are males that are extremely disciplined and there are females who are not. Experience and education do play another very important part as well. Education is the key to becoming a successful trader.
If you don’t have education it doesn’t matter what gender you are. We’re genetically programmed to do the exact opposite of what we should do as a trader. Buying high, chasing a stock and selling low fearing the worst is what most people do. We all know that we should be doing the opposite, buying low and selling high. Greed and fear are our biggest emotional enemies as a trader. Once you learn to control those emotions, you can begin to learn how to trade.
How can we change this whole gender perspective in regards to women traders? I’ve started to see some smaller changes happening at the Money Show and trader Expo events. More husbands are bringing their wives to these events. (except the one in Vegas).
For some reason, none of the men brought their wives. I have seen an increase in attendance of women at my presentations. On many occasions, women have come up to me at these events and told me they attended this event only because I was a woman.
I feel blessed and honored that other women are entering this field and gaining an education on trading because I inspired them to do so. We have almost one hundred female traders right now in my live trading room. We have a 3 to one ratio of male to female traders.
We need to start teaching our daughters and granddaughters that they can be anything when they grow up. We need to tell them that they could be a banker, a financial analyst, a trader, a teacher, a doctor, a lawyer, or even the President if that is what they want.
To my surprise, a few weeks after I returned from the Toronto MoneyShow, the elderly woman that approached me at my kiosk signed up for a trial membership to my online educational trading room. She is now learning how to trade. These are the priceless moments in my career.
Until next time,
Stefanie Kammerman, has trained thousands of students worldwide how to Day Trade and Swing Trade over the past 22 years. She is the Founder and Managing Director of The Stock Whisperer Trading Company, www.thestockwhisperer.com where she runs an online educational trading room called “The Java Pit”. Her unique approach of old fashioned trading in a high tech world teaches her students how to trade by reading the tape and following the Dark Pool, which is how she spotted the last 9 corrections weeks before they happened.