As we’ve linked to on a regular basis, Financial News has been running a summer series on what it takes to work in particular areas of investment banking and asset management. While most of these have been interesting, inevitably the ‘trader’ profile is more so, simply because it starts talking about hormones and physiology.
This is nothing new; there have been various studies about how testosterone and cortisol have affected decision making on the trading floor – both positively and negatively.
As well as numerical ability – high if you want to trade derivatives, OK if you want to trade cash equities – you need to be able to handle stress. This means having a “low emotional score” and, when your emotions do crop up, being able to handle them.
More interestingly, you also have to be strong physically. John Coates, senior research fellow at Cambridge Judge Business School, said: “The evidence suggests that good traders would have a very similar physiology to an Olympic athlete: someone who has a good ratio of anabolic to catabolic hormones and whose steroid hormones spike when required. Unfortunately, this isn’t something you can pick up from a CV. And if you can’t ask someone’s age in an interview, you certainly can’t ask for a DNA test.”
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