What is the Right Kind of Music for Trading?

If we’re in the zone, focusing on the charts… what is the best music for us to have in the background?

We set out to discover the answer to this by filtering through various studies. Our aim was to achieve a marginal gain in our trading performance through the use of music. There was a lot of conflicting information at times, but here are the points which we believe give the most logical approach.

Before Your Trading Session

Before we start our trading session, our level of concentration isn’t so important. Instead, the more important factor is getting ourselves into the right headspace for working.

Ideally, for trading, we want to be alert, focused and as stress-free as possible. We want to reduce any anxiety or other emotions that may influence our decision-making process; anything that may harm our ability to concentrate on what we need to achieve in that session.

Before we start trading, it’s a good idea to get stuck into 15 minutes of our favourite tracks. One particular study from the Journal of Music Therapy states that listening to 15 minutes of music of personal liking significantly reduces stress.

They found through a study of different genres of music that the actual type didn’t matter. The defining factor was how much the subject enjoyed the piece of music. The more they liked the music, the more relaxation they experienced regardless of the type of music, whether it was intended to be soothing or not.

A study by the Montreal Neurological Institute also shows that music affects our mood by causing our brain to release dopamine. This has an important effect since positive moods lead to higher work performance, while negative moods reduce work attention performance.

During Your Trading Session

During your trading session is a different beast altogether and we need to be careful about what choices we make here.

Daniel Kahneman’s Limited Capacity Model outlines that there is only a limited amount of attention that we can deploy at a specific time. This means that while performing simultaneous tasks, there is a trade-off with attention based on the level of arousal of each task.

Basically, if we want to complete tasks simultaneously, we need the same amount of attention in total that we would need for each of them combined individually. If we don’t have the available attention for them both, one of them is going to suffer due to something called the ‘attention drainage effect’.

What this means in terms of music is that we need to avoid ‘higher involvement’ music. This would include things like hip hop, which requires a higher division of attention due to the lyrics and beat than something like light classical music or no music at all.

Two other studies elaborated by saying that industrial music or music with lyrics would diminish efficiency in complex mental work.

One research study shows that even while engaging in simpler tasks like reading if you have higher involvement music playing, you will experience a reduced task completion rate. In other words, you’ll start reading much slower.

Now that’s something simple like reading – so imagine the effect on reading the charts and comprehending what it’s showing you. It’s going to have a negative impact.

On the other hand, a study indicates that the difference in involvement is not necessarily dependent on it being classical or hip hop, but rather on our familiarity with the music. The more familiar you are with the music, the less attention it drains from other tasks being completed since the brain is not focused on decoding the message being delivered.

In addition to that, music increases vigilance regardless of the type it is, as stated by another study in the Journal of Perceptual and Motor Skills.

As if that wasn’t enough to keep in mind, another study shows that the music shouldn’t be something you strongly like or dislike. It needs to be pleasing but not something you love, otherwise, it reduces your concentration as you increase your involvement with the music.

My personal recommendation is to listen to a playlist of ambient music, there are some great ones on YouTube.

However, some people may just decide to opt for silence. This is also a good choice, although music prevents the unconscious brain from focusing on other external distractions that it needs to process. This enhances a person’s conscious ability to focus on the task at hand, therefore, music that can mask external noises but still can be ignored is better than no music at all.

After a Losing Trade or at Times of Stress

It is common knowledge that traders should not make decisions in an emotional state since their judgment is considered to be compromised. As mentioned earlier, music affects our mood by causing our brains to release dopamine, this can help us avoid extreme moods.

In 2011, Scientists worked with a band called Marconi Union to produce what is meant to be the most relaxing tune ever. The song is called ‘Weightless’.

“Studies found Weightless was 11 per cent more relaxing than any other song and even made many of the women ‘drowsy’ in the lab … It induced a 65 per cent reduction in overall anxiety and brought them to a level 35 per cent lower than their usual resting rates.”

So although we want to feel alert when we’re trading and have no risk of drowsiness, this may prove to be the perfect antidote at times of significant stress, such as after a losing trade or at the end of your trading session.

“The harmonic intervals – or gaps between notes – have been chosen to create a feeling of euphoria and comfort. And there is no repeating melody, which allows your brain to completely switch off because you are no longer trying to predict what is coming next … Instead, there are random chimes, which helps to induce a deeper sense of relaxation. The final element is the low, whooshing sounds and hums that are like buddhist chants [that] put you in a trance-like state.”

While Learning to Trade

Our approach while learning is slightly different to when we’re actually trading actively and know what we’re doing. Another piece of research showed that while learning something new, music does act as a distraction especially for complex tasks since the process is cognitively demanding. However, once the task has been practised and we get to a level where we’re comfortable carrying it out, listening to preferred music increases accuracy.

This means it’s likely to be better to learn something in silence. However, as mentioned above, this can sometimes lead to external distractions that we can’t control. So some light background ambient music may be preferable.

Understanding Your Personal Strengths

While all the different music choices we stated are important for us, it’s also important to consider our own personal characteristics.

Just because studies show that industrial music or death metal is unlikely to aid concentration, this doesn’t necessarily mean that you can’t choose to listen to that if you find it helps you perform better.

In fact, it has been proven that the optimum arousal threshold for extroverted individuals is much higher than introverted individuals. This means they may need the stimulus from music, whereas introverts may feel the music tends to overwhelm them, leading to reduced focus and worse performance.

So with all this being said, you need to experiment and find what’s right for you. But to quickly sum up what we discussed:

• Before your trading session, listen to 15 minutes of your favourite music that gets you in a positive mood.
• During your trading session, listen to something undemanding with no lyrics that you’re familiar with. I would recommend something like ambient music.
• When you’re feeling stressed, check out Weightless by Marconi Union, or go back to the 15 minutes of your favourite music as you did before your session.
• While you’re learning, opt for silence if possible, or some light ambient music to drown out background noise.

We used this research to put together a 1-hour playlist of ambient music, which could help your focus levels for trading. Let us know what you think, and if it works for you!