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5 Weird Trading Rituals

Date: Friday, May 13, 2016 3:40 AM EST

From the onset of time, human beings have associated certain activities with certain events, thus forming the basis of superstitious beliefs and actions. These have also spilled into the financial markets. Here are 5 weird trading rituals commonly practiced by traders.

  • Giving Male Traders Female Hormones

A certain brokerage firm ended up getting sued for making its male trainee traders take female hormones as part of its training program. The logic behind this according to the trader who was suing, was that the firm’s boss believed that male-driven aggression was one reason for bad trades in the market and that by taking female hormones, this perceived aggression could be tapered for more rational trading. The trader in question, Andrew Tong, began buying and taking female hormonal medication from the black market, but ended up getting sacked for losing millions in a bad trade. How about this for a weird trading ritual?

  • Never writing with a red pen

Many traders have taken belief in the law of attraction to weird and sometimes extreme levels, such as not writing with a red pen because red is associated with loss. Even school, writing colours of students are usually kept at blue or black while red is left for the examiners or teachers in marking of scripts. Red is thus associated with a permanently overhanging sword of Damocles, waiting to strike unwary traders. So avoidance of red pens is a weird trading ritual which may have some underlying fundamental basis.

  • Eating the Same Food On a Winning Streak

Weird trading rituals cannot be complete without a mention of some eating habits that have now become part of superstition. Some traders have come to associate eating certain foods with either success or failure. So while on a winning streak, they may eat the same food for lengthy periods of time.

  • Avoid Buying into an Asset a Third Time

There is actually some bit of truth in this weird trading ritual. Retail traders tend to get greedy when they notice that an asset that they have previously exited from with some profit seems not to have run out of steam. They then take the gamble and may even stake much higher than they should the third time, often with bad outcomes. This weird trading ritual also has its roots in the old saying of sticking one’s hand into a cookie jar too many times. However, those traders who know exactly what re-entry signals to look for and how to keep risk low so as to not be caught out.

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