How Music Influences Forex Traders

How Music Influences Forex Traders

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    Have you jigged like the camel yet? If not, then you are getting behind with the camel dance craze that is taking over social media. But not only camels can dance; even pups, birds, kittens, chickens, and other beautiful creatures sway to the sound of music. Forget them today, though. Because we have a more serious revelation: music might be the reason why your forex trading is or isn’t doing so well.

    A complex market

    According to a study published in the 2012 issue of North American Journal of Economic Finance, music has contributed to the volatility that has been witnessed in the market over the past decade. After analyzing the US Billboard Top 100 lists of fifty years, Philip Maymin implies that people’s musical preferences are contributing more to market behavior than previously thought.

    The NYU professor asserts that more people (stocks traders included) have shifted to listening to music with simple lyrics. This in turn has given them a more pessimist perception of the future, making them more cautious.

    Maymin, who majors on Finance Engineering, posits that traders who listen to complex lyrics tend to worry less, but this also makes them less cautious. As life becomes tougher, the demand for “heavy” songs has dwindled over the last decades.

    The claim on music preference holds water, especially when you consider that the 57th Grammy’s nominations list saw an increased number of the likes of Beck’s Morning Phase, Coldplay’s Ghost Stories, Pharrell William’s Happy, and Sia’s Chandelier among others- all of which are light music.

    However, cause and effect relationship between the developments in forex trading and changes in the listener’s attitude is still ambiguous. In other words, the research does not clearly show whether it is music that has changed the stock market, or if it is the changes in the market that have influenced musical preferences.

    After experiences of the dot com bubble and the 2008 market crash, any serious trader must have learned a lesson, with or without music. In addition, there is also the prevailing fear over the  impending Chinese stock market crash, which will definitely affect everyone, either on the positive or negative. All these might make a person cautious.

    Anyway, the study points out something very important; that music and forex trading have close ties.

    So, which one do you enjoy most between rock, R&B, Jazz, rap, country and the rest? Do you listen to music when trading? Experts think that you should do so. The reasons they provide include the following:

    Focus

    In a job that requires a lot of reading, calculation, data analysis and interpretation, and repetitive tasks, music can help to keep you focused. After realizing this fact, many corporates are now removing televisions from offices and are replacing them with speakers.

    It has been shown that the level of dopamine in the brain increases when a person is exposed to music. The chemical promotes functioning of the brain, and this includes attention span.

    Mood

    Every trader has their bad day. However, some people tend to dwell so much on their losses and end up spoiling their night as well. This is understandable, because when it comes to money matters, some setbacks are worth a grudge, especially if they carry lessons.

    But music can lighten up your mood and enable you to avoid worrying too much over spilled water.

    Blocking noise

    Unless you are used to it, the noise in a trading room can sometimes become uncomfortable.  Tests carried out on noisy kindergarten classrooms showed that children calmed down when classical music was played in low volume during sessions.

    Though no documented studies of this nature have been done on a trade room, it might actually work. Also, if you are working at home on a weekend, and there are children around distracting you with laughs and screams, try out this technique; it might just do the trick.

    Caution

    As argued in Maymin’s work, music makes you to become more cautious. If you find yourself making mistakes, and later you come to realize that there are things you could have avoided, see if songs can turn things around. Check out the Grammy awards lists for some of the best music titles.

    Taming you

    Are you the kind of person that takes breaks from the desk every other minute for no apparent reason? A suitable music list might tame you, so that you keep working for longer. When you fall in love with music, you will not want to miss a beat, and that means fewer “air breaks.”

    But are all kinds of songs suitable for a stock trader? Most experts do not think so. There are specific kinds of music that, according to the experts, might kill your trade. Here are some extra thoughts you should know about music and forex trading:

    Familiar music is better

    Listening to a new album when at work might actually prevent you from focusing on what’s important. When you are familiar with a tune, your mind maps all its curves; this minimizes suspense. Without the suspense, you can enjoy the tune passively.

    On the other hand, the problem with getting too familiar with a song is that you will master the lyrics, such that you find yourself singing a long. Even though you should not suppress the temptation to hum completely, it is recommended that you avoid getting lost in it.

    High volume kills creativity

    Playing your music in low volume is better if you want to remain creative and focused. Interpreting curves, reading news, and manipulating figures are involving enough. You also need some creativity in order to predict some of the market trends.

    On the other hand, when dealing with lighter tasks like filing forms, arranging your desk, cleaning the house, or replacing your car’s flat tire, louder music tends to make work more enjoyable.

    Instrumentals might work best

    There is a prevailing claim that music without lyrics is much better for mind intensive tasks, than those with lyrics. However, some people still perform well, regardless of what they are listening to.

    If you went to college, it is unlikely that you missed interacting with these unique individuals who could read novels or solve tough calculus, while wearing headphones booming with punk. In fact, the claim that loud music kills creativity doesn’t stand up to scrutiny, if you put these personalities into the picture.

    Perhaps you should try out all classes in the Grammy’s lists and see what works best for you. Previously, there were 109 award categories; now they have been reduced  to 78. Though this might limit your choice, there is still enough to listen to.

    Interesting developments

    If you think the highs and lows in the stock market are only significant in terms of money, then you are wrong. Some creative minds are using the curve movements to create tunes.

    It’s something you can also do with your computer. All you need is get a software that converts graphs to sounds. Afterwards, look for the stock market curves and assign tones to different positions. Meanwhile, you can listen to a sample of Forex market music here.

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