Abstract

https://ssrn.com/abstract=2659293
 


 



Do Retail FX Traders Learn?


Simon Hayley


City University London - Sir John Cass Business School

Ian W. Marsh


City University London - Sir John Cass Business School

September 11, 2015


Abstract:     
What is the benefit of experience? Using data from a leading trading platform we find no evidence that retail FX traders learn to trade better, but they do appear to make valid inferences about their innate abilities as traders. In particular, following an unsuccessful trading day they are more likely to cease trading, to trade smaller amounts and to trade less frequently. These effects are stronger for younger and less experienced traders who might be expected to have more to learn than older, more experienced traders. As regards learning through experience, surprisingly we find that more seasoned traders demonstrate a slight decline in performance once we account for the endogenous decision to cease trading, and even very experienced traders consistently lose money.

Number of Pages in PDF File: 41

Keywords: Market microstructure, foreign exchange, retail trading, learning


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Date posted: September 11, 2015  

Suggested Citation

Hayley, Simon and Marsh, Ian W., Do Retail FX Traders Learn? (September 11, 2015). Available at SSRN: https://ssrn.com/abstract=2659293 or http://dx.doi.org/10.2139/ssrn.2659293

Contact Information

Simon Hayley
City University London - Sir John Cass Business School ( email )
106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
Ian William Marsh (Contact Author)
City University London - Sir John Cass Business School ( email )
106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 7040 5121 (Phone)
+44 20 7040 8881 (Fax)
HOME PAGE: http://www.cass.city.ac.uk/faculty/i.marsh
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