The Music of The Markets: How Music Can Help You Trade
BY Chris Andreou
|January 12, 2021The music we listen to can influence our mood and our performance in the tasks we do every day. From plants growing according to the music they hear, to parents playing the classical sounds of Stravinksy’s violin concerto to their unborn children, it’s been proven that music has an effect on all living creatures. Even traders.
Whether you’re pondering your trading strategy, setting a mood for the markets, or even overcoming trading obstacles, the sounds you hear will set the tone of your investment psychology.
Be sure to check out this article from Psychology today which outlines the theory in more detail.
We’ve rounded up a few ways on choosing a soundtrack that will fire you up, calm you down, or help you think. Whichever needs may be.
How to Start The Day
Brew a coffee (or an Irish coffee, whichever you prefer), turn on your workstation, and load your Apple Music on Spotify while you sink your teeth into today’s fundamentals, preparing for the opening trading session.
Several traders across various forex forums argue that classical music is the way to go. How come you ask? Because it doesn’t saturate senses nor does it overwhelm you with emotions. Some traders prefer soothing sounds, while others prefer a more upbeat, active style.
According to ScienceDaily, music with a fixed tempo is proven to increase accuracy, while Pubmed argues music without vocals is proven to be better for focus and attention. The American Psychological Association on the other hand says music in a major key is proven to lift the mood of the listener.
It’s also important to choose a genre that’s right for you. If you’re going for relaxation, perhaps don’t choose something that’s just going to send you to sleep while the markets have a fit in the background. Instead, opt for classical music with just instrumentals allowing your mind to focus solely on trading.
Top tip: ensure you regularly switch between relaxing and more upbeat music to help your brain stay active.
Use Tools to Help You Pick The Right Music
Streaming services such as YouTube, Apple Music, and Spotify offer thousands of choices from you to choose from. You can even discover playlists other users have created which have been designed to suit exactly what you’re looking for!
All of the music streaming services offer an impressive selection of playlists that are all centered around concentration, study, or mediation. When you get the time, sit down and experiment with different types of music and which types help you focus while trading.
By now you’ll know that fear and greed are two key emotions that can impact you the most during trading. Hence the need to always try and control them. For example, should you find yourself in a few losing streaks, your mood will naturally decline. Any negative or loss in moods can stop you from spotting new trading opportunities. The same goes with winning, overconfidence can also be a killer to your trades and thus most result in you taking risks.
Opting for music that can keep you balanced, and help you to take an objective view of the markets, will lead you in the right direction.
Let’s look a little deeper as to how music can improve efficiency and accuracy…
Increased Focus
In one study, 102 workers concluded that background music with lyrics had significant negative effects on concentration and attention. Leave that Arctic Monkeys vinyl for the next time you’re cooking.
Or maybe don’t. Pink Floyd, Metallica, or Notorious B.I.G might not be your best options while you set up your entry, position size, and exit positions. But that’s only according to science. We find that as long as you know the lyrics well enough that you’re not splitting your attention between the song and the chart, you’ll be in just the right zone to tune into the markets.
Yet more research argues that ambient, more calm sounds help to increase your focus (stay tuned for our music picks further down).
Mood Lift
Background music can largely affect anxiety, satisfaction with communication, and productivity. Research has shown that listeners exposed to music (in a major key) were more productive, compared to those who listened to more inharmonious tones and minor keys.
Different types of music will cause people to react in different ways.
Let’s hope you don’t pump the latest techno beat only to find yourself drifting from trading to the nearest rave.
Studies show that any changes or positive impact are not definitive. Changes in the brain (apparent increase in certain brain activities) are temporary as the effects seem to stop once the music is paused.
It all comes down to how music can make you feel. If you listen to something that you view as calm and soothing while trading, you may perform better, which in turn helps your capacity to reach your personal goals.
When it comes down to it, you simply need to find a way to handle the emotions that come with the game.
Editors’ Choice
If you’re looking for something to help you on your journey as you traverse the ups and downs of the market, we’ve got you covered.
Des’ree – You Gotta Be
It’s the lesson that keeps getting taught…
“You gotta be bad, you gotta be bold, you gotta be wiser…”
It’s good to be reminded of it.
Remember, get familiar with the lyrics so that listening doesn’t take you out of the zone.
For a little sense of calm and serenity, we and another trader recommend the following:
Explosions in the Sky – The Earth Is Not a Cold Dead Place
“They do only instrumental work, but I definitely love the movement and strength they carry through in their pieces. It’s the kind of stuff you hear during the background of those tear jerking scenes from the great movies. I have my lame moments, I know, but I really enjoy the power in their music. They did the soundtrack for “Friday Night Lights” if anyone is familiar with that movie.”
– Forex trader
Focus – Le Clochard
When you just need some peace & quiet to concentrate on adjusting your plan after a hard day’s trading.
Mozart – Piano Sonata No. 11 in A major, K. 331 – I. Andante grazioso
In honour of the timeless classics. In honour of nailing this week’s plan.
Celine Dion – My Heart Will Go On
It’s not our top pick. But this fella on Forex Factory seems to think Titanic ‘My heart will go on’ will help him hit his million-dollar goal in trading. Hey, who are we to judge! Our hearts go out to his neighbours.
Jack White – Lazeretto
Do yourself a favour and tune into this bad boy. It sets the tone perfectly for the Non-Farm Payrolls.
Frank Sinatra – That’s Life
“Riding high in April, shot down in May…”
How to ride life with all its ups and downs. The renowned jazz star couldn’t have said it any clearer.
Sheryl Crow – Everyday Is A Winding Road
“I get a little bit closer…”
“Everybody gets high, everybody gets low”
“Lay back, enjoy the show”
No explanation needed.
Notorious B.I.G featuring Puff Daddy and Mase – Mo Money Mo Problems
Biggie – The king of Philosophy
“I don’t know what they want from me. It’s like the more money we come across. The more problems we see”
“It’s just the way it is”
Anybody else still thinks of this one as a Puff Daddy song?
And last but not least…
According to one trader, ‘The Glamorous Life’ by Sheila E is a great shout for when you’ve just had a phenomenal day and dinner’s on you..
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