Choosing between Beethoven's nocturnes and your favourite 90's Eurodance hits in your Spotify playlist may not be the first thing that comes to mind when thinking about building a successful trading strategy, but music can help you become a better trader. That is why it is worthwhile to think carefully about the tracks you listen to each time you fire up your trading account.
Essentially, trading revolves around movement - that of the underlying price action. And movement is all about rhythm. Whether we are talking about sporadic price fluctuations reminiscent of the aggressive drums in a death metal track or steady directional price action that reminds us of the smooth violin chords in classical music, rhythm is ever-present in trading.
Music speaks to our emotions, so traders need to make sure they listen to the right melodies as part of their trade preparation. They need to be in the proper state of mind before they start executing any positions, and music can help with the task at hand.
If you want to go to the gym for another killer workout, chances are you will not get pumped by your grandmother's favourite polka songs. For example, Eminem's 'Till I collapse' is a much better choice for getting yourself excited enough to bench-press more than you did last time.
Just like fitness buffs, traders, too, should only listen to tracks that can motivate them (not distract!) to achieve their goals. The rhythm of the music they choose should serve two main functions:
Firstly, the music you select has to prevent you from getting distracted. The keyword here is concentration. The music shouldn't be too demanding of your attention, but at the same time, it should be more than simple background noise.
Think of Pink Floyd's 'High Hopes' or better yet 'Money', just to stay consistent with the theme of the whole endeavour. These elongated tracks will inspire you with the smooth melody that flows out of them. The minimal vocals will not distract you, while at the same time, the masterful tunes will focus your attention right on your charts.
Ideally, you need to select a type of music that flows naturally and smoothly. Any rhythm that is devoid of any sudden peaks and valleys will put your mind at ease, while the lack of prolonged aggressive beats will not compel you to make any rash decisions.
Secondly, best you avoid listening to tunes that are too aggressive while monitoring the market. I am sorry Metallica, Iron Maiden, and Rage Against the Machine fans; a good trader strives for precision, not dominance. Classics like 'Killing in the Name' are ideal for having a jumping Friday night or taking down governments but are not quite useful when you are trying to get the most precise entry into a trade possible.
The aggressive drum beats and vocals are more likely to compel you to make rash decisions rather than help you preserve the necessary composure to wait for the market conditions to become suited to your strategy.
It would certainly help if you can stay focused at all times, so you have to remember that the music you decide to listen to while examining the opportunities for trading on the market should not occupy your attention completely.
Whenever the market is range-trading, the horizontal price action can become daunting and repetitive after a while. It is pretty easy to see how traders can become easily distracted and bored when nothing significant seems to be happening. Under such conditions, our personal recommendation is to turn to Vivaldi's 'Four Seasons'.
The beauty of this classical music hardly needs any additional praises, yet its smooth transition from one state into another is what interests us with regards to trading. Whenever the market seems to be floating aimlessly, Chopin's masterful direction could help you stay focused on the broader market sentiment without getting bored with the uneventfulness in the short term.
The melodies signifying each of the four seasons are noticeably different, with distinctly varying violin chords. At the same time, the music as a whole does not seem to be inconsistent in the least.
The smooth transitions of the melody from one state into another predispose any sharp ear to stay focused in anticipation of future changes. This is exactly the state of mind that a trader needs to be in whenever he or she expects a future breakout or breakdown from an existing range.
Most importantly, you need to choose melodies that you enjoy thoroughly. You do not want to be bored or uninspired with the music you listen to while trading. It is also a good idea to change your tracks and playlists regularly so that they do not become repetitive over time.