All traders continually look for ways to improve their results. For example, I always advise my students to keep accurate records of trades, they provide a great way to monitor success, and improve weaknesses.

One trader (or rather, a former trader) has gone further than anyone else though. His name is Dr John Coates, and he’s a researcher at Cambridge University in England. His research has shown that there is a “secret ingredient” that makes some traders more profitable than others – that ingredient is testosterone!

It seems that the hormone which is responsibly for being “manly”, plays a large part in successful trading. Dr Coates carried out controlled tests on 17 day traders in London, monitoring testosterone levels before and after the trading day. His research proved conclusively that those traders with higher levels of the hormone in the morning, made above average profits during the day.

Apparently higher levels gave traders the courage to take more risk in their trading.

But before you rush out and buy steroid pills, you may want to know that the tests also showed too much testosterone caused trades too take silly risks and end up losing cash.

This is a fascinating story, the underlying fundamentals at work here (risk / reward / loss) tell us an awful lot about how we should approach trading.

If you want to read more about Dr Coates research, check out this press release.