I recently searched PubMed for information on the biological aspects of successful traders. This post shares some interesting results presented in medical papers.
Arguably the most famous study is “Endogenous steroids and financial risk taking on a London trading floor” (PDF). It was published in 2008 and has been cited over a hundred times, according to Google Scholar.
Here are some additional results from studies about trading, as well as medical and psychological studies that could have relevance to traders:
• Steroid hormones in traders may lead to exaggerated market moves. (PMID: 20026470)
• The finger length ratio is a surrogate marker of prenatal androgen exposure that predicts the amount of risk taken by traders. (PMID: 19946367)
• The digit ratio predicts success among high-frequency traders. (PMID: 19139402)
• Italian traders like cocaine. (PMID: 19798899)
• Stock brokers are biased by their prior knowledge. (PMID: 20976157)
• Higher levels of synchronous trading are associated with a lower likelihood of losing money. (PMID: 21402941)
• Professional traders do not fall prey to the Allais paradox less frequently than students. (PMID: 15634739)
• Individuals with high levels of testosterone and low levels of risk aversion are more likely to choose risky careers in finance. (PMID: 19706398)
• There are physiological differences in traders during volatile events compared to no-event control periods. (PMID: 11970795)
• Thinking like a trader reduces loss aversion. (PMID: 19289824)
• In a trading game, participants who had higher imagery, creativity, and socioeconomic status made much more profit with their portfolios. (PMID: 11508012)
• Oxytocin may increase trust among trading partners. (PMID: 15931222)
• Receiving prior social and moral information influences interactions with trading partners. (PMID: 16222226)
• Lower in vivo caudate volume is associated with higher prediction error. (PMID: 21600226)
• Variants of genes that regulate dopamine and serotonin neurotransmission are significant determinants of risk taking in investment decisions. (PMID: 19209222)
• Human risk preferences are sensitive to metabolic state. (PMID: 20585383)
• Nucleus accumbens activation precedes financially risky choices. (PMID: 16129404)
• Anticipation of rewards increases financial risk taking. (PMID: 18388729)
• Female physical contact can increase financial risk taking. (PMID: 20554603)
• Men overestimate their tolerance for risk and women underestimate their tolerance for risk. (PMID: 17688097)
• After a major market downturn, stockbrokers experience changes in dream characteristics. (PMID: 12150390)
• Stockbrokers with Machiavellian behavior are more likely to have better sales performance (PMID: 12061584)
• Chimpanzees can trade among one another, but they do it differently than humans. (PMID: 18231604)
