BBC article on the effect of Adrenaline and Cortisol on Traders Risk appetite

BBC traders risky behaviour

I admit that I missed this piece by the BBC until very recently.

The gist of it being: Raised levels of the hormones testosterone and cortisol can make traders take more risks, which could create instability in financial markets, a study suggests.

I’ve always been fascinated by the impact of hormones on a traders behaviour or results since taking part in the xDelia project a few years ago. (I have attached my results from one of the xDelia sessions at the very bottom of this piece in case any of the super-geeks want to take a read, and see how I fared.)

That project took an interesting look at the disposition effect co-efficient and also the effect of hormone changes. The xDelia view was that  a profile of increasing testosterone and decreasing cortisol was associated with higher profits and more rational decision-making.

Now both of those studies were based on a stock-market game rather than the cut and thrust of real market operations. Nevertheless the results are interesting and are worthy of consideration. Clearly most of us have no idea what our hormone levels are on a day to day basis (though we maybe aware of how they manifest themselves in our behaviour in both life and the markets.) Within the trader performance / management niche it has led to more and more of a drive towards mindfulness and meditation, in some way, to help manage ourselves better and regulate our emotions.

Do you include any kind of meditation or mindfulness in your trading? If not, maybe it’s time to bring it into your trading routine. If you’d like to learn more then an interesting place to start (well it was for me) is to read the book “The Power of Now”

Trade well!



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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

View all posts by FXTraderPaul


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