Quant Data Analysis for Brokers

All computations were performed on the data from the forty-fifth
(the fifth last) trade. The two treatment subgroups, each receiving
a three-hour lecture, were compared to each other in order to
determine if they differed significantly in means of number of
bankrupt traders, or by means of accumulated trading capital.
Average position-size differences between bankrupt/surviving and
losing/winning traders were computed by use of one-tailed t-tests.
This method of analysis was also used when comparing the position
size of the treatment and control group.
The difference between treatment and control group, regarding
the number of participants going bankrupt and the number of
participants being able to gain money by trading were computed by
chi-square analysis.
Trading in the stock markets is associated with both losses as well
as gains. There are not many traders who have been able to trade
over a longer period of time, without taking any losses. On the
other hand, every now and then, many of them have had
opportunities to make a substantial profit.
An essential requirement to receive a profit from an opportunity is
to be ready to take the chance when it occurs. If one does not
have the money to take it, the opportunity is gone. Therefore, it is
of outmost importance to survive in the short term, so one is able
to stay around for the next opportunity for a good profit.
Consequently, it was of greater theoretical importance to this
study whether a trader lost his/her entire stake or was able to
survive in the market by trading stocks, than the absolute amount
gained. This was the reason for primarily using data at nominal level
and chi-square analyses. Accordingly, a 10,001 fSEK difference
between a bankrupt trader and a winning trader is more important
than a difference between one trader gaining 560,000 fSEK and
another trader gaining 570,001 fSEK.
In the real world, a trader losing all his/her money can not be
compensated by huge gains of another trader. On the contrary, in
the light of one’s own failure, the knowledge of other traders’
success will most probably make the grapes taste even sourer.
Nevertheless, the difference between the two means of total
capital accumulated by the treatment and control group,
respectively, was computed by use of one-tailed t-tests.
Analysis of variance, chi-square analysis and t-test explored the
effect of prior knowledge of trading/investing in the stock markets
and gender.


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