Adaptive Trading and Longevity

We examine the relationship between trader longevity and trader behavior in U.S. equity markets. Traders who change how much, what, when, and where they trade often remain active for a longer period of time. Although longer (shorter) duration traders tend to perform better (worse), changes in trading behavior rather than performance is the key determinant of longevity. Overall, our findings suggest that securities traders who are able to adapt and alter how they trade in light of continually changing market conditions are more successful. * Ryan Garvey is with Duquesne University, Pittsburgh, PA. 15282. Telephone 1 412 396 4003, fax 1 412 396 4764, email [email protected]. Fei Wu is with Jiangxi University of Finance and Economics, Nanchang, China. Telephone 86 791 381 6750, fax 86 791 381 6792, email [email protected]