Fear of missing out
Almost everyone who has been trading on the stock exchange for a long time is familiar with the feeling when it seems that almost everyone is more successful, and you are just wasting your time.
In fact, this happens to traders so often that this psychological state has even received its own name, “Fear of Missing Out.”.
FOMO is experienced by most beginning investors, a psychological state that occurs when traders believe they are missing out on big opportunities or feel less successful than other investors.
The main causes of FOMO are inflated expectations, lack of a long-term action plan, overestimation of one's own strengths, and an unwillingness to wait.
Example of Fear of Missing Out
A great example of a FOMO-driven trade is the Bitcoin price. Most people regret not buying the cryptocurrency at $1 and don't want to regret the lost opportunity if the price rises to $1 million:
Under the influence of this regret, they make a purchase even when the price of a given asset is at its maximum.
For example, quite a few people bought Bitcoin at $60,000 and then sold it at $19,000, never seeing any growth.
Causes of FOMO
This syndrome is directly related to psychology; more precisely, it arises from a mixture of various feelings and emotions that arise during trading on the stock exchange.
The most important of these are emotions such as fear, greed, anxiety, jealousy, and impatience. The trader's personal qualities, such as quick decision-making and excessive trust in the opinions of others, also enhance their influence.
During an uptrend, greed, envy, and euphoria take over, and traders continue to hold positions even after the trade has already generated the planned profit. Or they buy at the end of a trend simply because others are bragging about their profits:
When prices fall, fear, anxiety, and panic take hold. Most investors sell, but those prone to FOMO may hold on to their positions until the very end, hoping for a reversal .
How to deal with the syndrome of missed opportunities
If you fall under the influence of such a psychological state, it will be quite difficult to get out of it.
Recognizing that you have FOMO is the first step to recognizing that there is a problem, that it really exists, and that you need to take steps to combat it.
Take control of your emotions – you should never give in to your emotional state, no matter what it is caused by, a series of successful trades or a losing streak:
In any case, if you are experiencing excessive excitement, it is best to take a break and stay away from the trading platform.
Time management on social media – constantly spending time on social media dedicated to stock trading doesn't lead to anything good.
They often brag about their wins and rarely talk about their losses, so you might get the impression that you are the biggest loser among all the participants.
Risk management – setting stop-loss and take-profit orders helps avoid many problems, including large losses. It prevents you from changing your decisions under the influence of crowds or emotions.
Justification for the deals is not sufficient justification, only the fact that the price of gold has been rising for the second week and everyone around has already made money on it.
It is necessary to clearly understand why it is growing and how long this trend will continue.
In other words, to overcome the syndrome of missed opportunities, you must first learn to rely solely on the current market situation, verified news, and your own opinion when opening trades.
