0100476804

open access

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Who Is Successful in Foreign Exchange Margin Trading? New Survey Evidence from Japan

English (英語)

Sustainability

14(18)

11662

MDPI

2022-09

2022-10-03

We use a 2018 survey of FX margin traders in Japan to investigate which key factors influence their trading performance: socio-demographic and economic situation, investment strategy and trading behaviour, and/or financial literacy. We study this question using general-to-specific modelling and impulse-indicator saturation. First, the data show that variables from all three groups are significant predictors of traders’ performance. Second, we find that older traders and those without a specific trading strategy demonstrate lower performance. Performance is higher for those who trade greater amounts, rely more on fundamental analysis, and report having profitable FX trade skills. Third, respondents’ subjectively stated claim of having FX trade skills is based on a more advanced understanding of FX trading and a reliance on professional advice. Neither objective financial knowledge nor over/underconfidence play a noteworthy role in the performance of margin traders.

Japan

学術雑誌論文

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).