e-bilities^® can help to identify “star” share traders.

The nature of investing is undergoing significant change owing to the growth in online trading. Trading has become easier and cheaper, and people from all walks of life now trade. The majority are novices who manage their personal portfolios from their computer at home.

A recent study using e-bilities^® suggests there is cause for concern where novice traders of lesser mental ability are actively trading in an unassisted way.

Thirty-eight business students with a low level of trading experience completed a battery of e-bilities^® tests prior to trading on a computer simulation of a real-life trading system. They were given basic education in the operation of the "market", and every offer to buy or sell shares, as well as each purchase and sale they made, was logged.  As in real stock markets, the prices of the shares were dynamic, being determined by their trading activities.

• Of most interest was the amount of money they made, and it was found that an overall general mental ability score from the e-bilities^® tests could predict their total cash payout.
   
  
• It was also found that the ability of these novice traders to acquire basic knowledge about share values and pricing could be predicted by the tests.
   
  
• Higher levels of trading were seen in those people who were over-confident in their mental abilities.
  

These results are amongst the first of their kind in the behavioral finance field, and are consistent with the large body of research that demonstrates the importance of general mental ability for acquiring knowledge and for successful task performance.