The following article is an excerpt from Exness’ Psychology of Trading report, which examines the realities of making trading decisions under high-pressure, psychologically intense conditions. To do this, Exness surveyed a range of successful day traders, and interviewed a host of high-pressure decision-makers from outside the world of finance, to get their tips on how to handle the thrills and make the right move when the clock is ticking.

If you ask the man on the street to describe a trader, they will probably conjure up an image of an arrogant twenty-something in a pinstripe suit who is convinced of his own brilliance.

But that image of the coolly self-assured young person is far from the truth, because when it comes to trading, age breeds confidence.

A survey by Exness found that the older you get, the more confident you are with your trading abilities. Day traders aged 55 and over are much more self-assured than their younger counterparts, with 45% saying that they are confident in their trading abilities compared to just 11% of Gen Z respondents, 25% of Millennials and 34% of Gen X respondents.

When we interrogate the data further, we see that older traders generally exhibit cooler and calmer trading behavior. Those aged 55 and over are more likely to close their trades early, know when to close manually, don’t hesitate and show the most patience in holding onto losing positions for longer.

Part of this is down to experience. Older traders are more likely to have racked up years of practice, making mistakes and learning from them along the way.

Robert Kershaw, a former paratrooper and military historian, said that gaining experience by doing a range of roles is critical to shaping good judgement.

He says: “The reason [top military staff] have excellent judgment is because they’ve done all the jobs along the way. If you’ve got somebody who’s been immersed in the field with which he has decided to become an expert, his judgment will be pretty good by the time he is nearing the top.”

But it may not just be experience that fosters confidence in older traders. Baby boomers tend to trade for different reasons than their younger counterparts.

Nearly three-quarters (73%) said they traded for the intellectual challenge and to up-skill their financial abilities (64%). Whereas younger cohorts were more likely to trade to be their own boss (63% of Gen Z respondents) or to earn more money than as a traditional employee (55% of Millennial respondents).

Those different reasons for trading may affect how different age groups think and approach trading. There is less at stake for older traders who are trading for the thrill of learning than for nervous youngsters who are trading to pay the mortgage or finally give up that job they hate.

Keith Hackett, former top-level football referee, agrees that age breeds experience.

He points out that by the time a referee joins the Premier League he will likely have spent ten years honing his skills in lower leagues – a crucial period for him to make mistakes and gain the level of confidence needed to cope in the big leagues.

“I think a great referee takes risks”, he says. “The more experienced referee is likely to have experienced conflict to a greater level, therefore he has the ability to take greater risks. Because he says to himself ‘I’m in control. I don’t have a problem’”.

Those risks could be giving a verbal warning to a player rather than a yellow card, or even allowing the match to continue after a foul if the team that was fouled has possession.

“The confidence comes through experience. These are absolute measured risks. That process helps you reduce conflict and your actions have actually added positive response,” he says.

But he cautions that confidence can “easily trip into arrogance” and experienced practitioners need to make sure they are always learning.