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Uninformative Feedback and Risk Taking: Evidence from Retail Forex Trading / Itzhak Ben-David, Justin Birru, Viktor Prokopenya.
- Format:
- Book
- Author/Creator:
- Ben-David, Itzhak.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w22146.
- NBER working paper series no. w22146
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Uninformative Feedback and Risk Taking
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2016.
- Summary:
- We document evidence consistent with retail day traders in the Forex market attributing random success to their own skill and, as a consequence, increasing risk taking. Although past performance does not predict future success for these traders, traders increase trade sizes, trade size variability, and number of trades with gains, and less with losses. There is a large discontinuity in all of these trading variables around zero past week returns: e.g., traders increase their trade size dramatically following winning weeks, relative to losing weeks. The effects are stronger for novice traders, consistent with more intense "learning" in early trading periods.
- Notes:
- Print version record
- April 2016.
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