Sunday, 20 April 2008

Traders,Testosterone and Risk

Research by Dr Coates and Dr Herbert at Cambridge,reported in April 19th Economist, shows that on the days when traders' testosterone levels are high they are more successful. It is not that testosterone rises because they are successful, but that the higher levels are followed by success.

On the other hand when it came to stress, uncertainty was a much bigger driver than failure.

As you might imagine we are only talking male traders here.

There is separate evidence, not in the Economist article, from Spanish scientists, Martinez-Sanchis,Aragon and Salvador of an interaction between testosterone and cocaine on the central nervous system. What is unclear is whether traders could gain success by enhanced testosterone levels due to cocaine intake. The danger is that those desperate for success some will consider this link a given. It is not.

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