What Finger Size Says About Your Trading Skills

What Finger Size Says About Your Trading Skills

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Take someone’s hand and look at his 2nd and 4th finger. The ratio of the length of each fingers is a marker of success in highly competitive sports. Actually it goes beyond just the sports world: It is also a reliable prediction of success in competitive risk taking-trading in the financial world (study of Coates JM, et al., 2009 in PNAS).

How so? Because the length of the 4th finger is determined by prenatal testosterone exposure. The higher the exposure to testosterone, the longer the 4th finger, as well as the other testosterone organizing effects on brain development and future behavior.

Here is a graph taken from Coates JM,  et al., 2009 study that was conducted in the City of London in which they sampled 2D:4D from a group of male traders engaged in what is variously called “noise” or “high-frequency” trading. P&L means Profit and Loss, a measure for financial gain or success. The statistical analysis is very convincing (p=0.0009), so the correlation  exists, even with a low correlative index (r=-0.482).

(In layman’s terms, the higher the 2D:4D ratio (pointer finger: ring finger), the higher the testosterone levels, the fewer the losses recorded by high-frequency traders)

The authors conclude: “The 2D:4D ratio predicted the traders’ long-term profitability as well as the number of years they remained in the business. 2D:4D also predicted the sensitivity of their profitability to increases both in circulating testosterone and in market volatility. The results suggest that prenatal androgens (i.e. testosterone) increase risk preferences and promote more rapid visuomotor scanning and physical reflexes. The success and longevity of traders exposed to high levels of prenatal androgens further suggests that financial markets may select for biological traits rather than rational expectations.”

 

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2 Responses to “What Finger Size Says About Your Trading Skills”

  1. Chauncey says:

    My sixth finger is three times longer than my ring finger.

  2. Gail says:

    I am skeptical I have seen studies that women actually have better performance mainly because they are not as likely to overtrade.

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