The Colour of Trading — How Colours May Affect Our Trading Performance

Here are the key points from our video ‘The Colour of Trading — How Colours May Affect Our Trading Performance’ that you can use as a reference guide or ‘cheat sheet’. The video is available on our YouTube channel and at the bottom of this article.

In trading, we know that our emotions and state of mind have a big effect on our performance and how we react to situations in the market. Surprisingly, it can sometimes be simple things that affect our moods and emotions, with one very simple thing being colours.

Therefore, as part of our continual search for more marginal gains in trading, we decided to understand more about how colours may affect our trading performance. You may recall us doing something similar with the subject of music, as we attempted to find the perfect music for trading.

Here is a summary (excluding black and white) of how the 4 different ‘psychological primary colours’ affect our mood:

Blue

A tranquil and cool colour, making us feel calm and relaxed. It has even been found to slow down your heart rate and blood pressure, so it is even calming from a physical point of view. However, blue can also be associated with feeling down, hence the saying ‘having the blues’ or ‘Blue Monday’.

Perhaps avoid using shades of blue if you’re having a particularly bad month in the markets.

Yellow

Often associated with happiness, cheerfulness or hope, but it is also associated with intelligence and an inquisitive mind. This sounds like the perfect characteristics for a person: happy, positive and optimistic but also intelligent and inquisitive.

However, yellow can also evoke irritation and anger. This could be because of the amount of light in the colour, which means the eyes have to focus a bit harder, therefore putting more strain on the eye.

Perhaps not the best colour to have as your chart background, but maybe a consideration for your trading room.

Red

From love and warmth, to anger and danger; red brings up a range of emotions. In fact, it can also signify power and dominance. Some studies have shown that in…