Using account-level daily data provided by SBI FXTRADE Co., Ltd. from 2021 to 2023, I find that female traders outperform male traders in the retail foreign exchange (FX) market across two profitability metrics: a likelihood of gaining positive profit per day and daily profit relative to order amounts. For instance, women have approximately a 5%-point higher probability of achieving positive profit and about 0.01%-point higher profit-to-order ratios than men. The gender gap in those profitability measures remains robust across different levels of personal assets. In the estimation by income bracket, a significant gender difference is observed except for the highest income tier. Three empirical facts help explain this gender gap. First, limit orders are positively associated with profitability, whereas stop orders are negatively associated. Women tend to use more limit and fewer stop orders than men, contributing to superior performance. Second, the decline in profitability associated with increased trading experience is larger for men than for women. This fact suggest that women exhibit a less substantial overconfidence bias than men. Third, the likelihood of exiting the market declines with successful trading experience, and this decline is more pronounced among women, suggesting a more effective self-selection process favoring skilled female traders.
Taiyo Yoshimi (Tue,) studied this question.