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The University of Southampton
Centre for Risk Research

Risk PhD Students Deliver Seminars on How to Improve Trading Performance

Published: 16 December 2014
Ming-Wei Hsu

Ming-Wei Hsu (pictured left) and Juan-Carlos Moreno-Parades, PhD students in the Centre for Risk Research, recently delivered seminars in which they highlighted some of the key factors that can lead to improvements in the performance of financial traders.

In the first seminar, Ming-Wei explained that in his research he examined the degree to which individuals learn to improve their trading performance. He explained how he analysed 8,441,805 trades from 28,061 spread-traders over a 10-year period and found that with more experience, traders make higher returns but take greater risks. Ming-Wei found that this resulted in a lower risk-adjusted (Sharpe ratio) performance and that this conclusion held after accounting for selection bias and survivorship bias. He explained that this is the first study to examine learning effects using individual level empirical trading data from a risk perspective.

Juan Carlos
Juan Carlos explains his findings

In his seminar, Juan Carlos explained that individual investors in financial markets have been found to make systematic mistakes, such as the Disposition Effect (the tendency of investors to sell winning and hold losing positions, leading to poor trading performance). He argued that past studies have demonstrated that expertise, learning and the sophistication of the trader can reduce this tendency and improve performance. Juan Carlos explained that he found strong empirical evidence to suggest that using mobile apps as a trading tool can enable individual investors to improve their trading performance in terms of both achieving higher returns and reducing systematic errors such as the Disposition Effect.

Ming-Wei holds a BSc and MSc in Computer Science from National Taiwan University and an MSc in Accounting and Management from the University of Southampton. He is now a PhD student at Southampton Business School studying the effects of trading experience in financial markets. His research is supervised by Professor Ming-Chien Sung, Professor Johnnie Johnson and Dr Tiejun Ma.

Juan Carlos holds a degree in Applied Mathematics, an MSc in Operational Research and an MSc in Risk Management. He has been a PhD student at the University of Southampton since 2012 where he is now employed in the Centre for Risk Research as a Research Fellow.

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