Monday 09, Nov 2009
Performance of financial traders affected by hormone levels
Posted Byi steroids
According to a new research conducted at the University of Cambridge, City traders are likely to make more than average profits when they have high morning testosterone levels.
It was hypothesized by the involved scientists that this improved performance may be because of the fact that testosterone is known to increase appetite for risk and confidence – two qualities that can easily augment the performance of any trader.
Testosterone is a steroid hormone that controls competitive encounters and sexual behavior.
From News-Medical.Net:
The researchers also speculated that if testosterone continued to rise or became chronically elevated, it could begin to have the opposite effect on a trader’s profitability by increasing risk-taking to unprofitable levels. Previous studies have shown that administered testosterone can lead to irrational decision-making. They believe that this is because testosterone has also been found to lead to impulsivity and sensation seeking, to harmful risk taking, and in extreme cases (among users of anabolic steroids) to euphoria and mania.
Testosterone may therefore underlie a secondary consequence of the ‘winner effect‘ in which a previous win in the markets leads to increased, and eventually irrational, risk taking in the next round of trading.
It was concluded that the influence of naturally produced steroids in the body, especially cortisol and testosterone, can provide insights into how and why people caught in crashes often find it tedious to make a rational decision.
Tags: anabolic steroids, cortisol, steroid, steroid hormone, steroids, testosterone
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