A state of fear of missing out
Almost everyone who has been trading on the stock exchange for quite some time is familiar with the situation when it seems that almost everyone is more successful, and you are just wasting time.
In fact, this happens to traders so often that this psychological state even got its name “Fear of Missing Out,” which translates as “Fear of missing out.”
FOMO is experienced by most new investors, a psychological state that occurs when traders think they are missing out on big opportunities or feel inferior to other investors.
The main reason for FOMO is high expectations, lack of a long-term action plan, overestimation of one's own strengths and unwillingness to wait.
Example of Fear of Missing Out
A great example of a trade driven by FOMO is the price of Bitcoin. Most people regret not buying this cryptocurrency at a price of 1 dollar, and do not want to regret the lost opportunities if the price rises to 1 million:
Under the influence of this regret, they make a purchase, even when the price of the asset is at its maximum.
For example, quite a lot of people bought Bitcoin at a price of $60,000, and then sold it at $19,000 without 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 in the process of trading on the stock exchange.
The main ones are emotions such as fear, greed, anxiety, jealousy and impatience. The influence and personal qualities of a trader’s character also enhance their influence - speed of decision-making and excessive trust in the opinions of others.
During an upward trend, greed, envy and euphoria take over; the trader continues to hold the position even after the transaction has already brought the planned profit. Or he buys at the end of a trend only because others are bragging about their profits:
When prices fall, fear, anxiety and panic begin to dominate the trader. Most investors are selling, but those who are susceptible to FOMO may continue to hold positions until the last minute in the hope of a trend reversal .
How to deal with missed opportunity syndrome
If you are under the influence of such a psychological state, it will be quite difficult to get out of it.
Admitting that you have FOMO is the first step to admitting that there is a problem 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 streak of failures:
In any case, if you are feeling overly excited, it is best to take a break and stay away from the trading platform.
Time control on social networks - constantly sitting in networks dedicated to stock trading does not lead to anything good.
They often brag about winnings and very rarely talk about losses, so you may get the impression that you are the biggest loser among all the participants.
Risk management - setting stop loss, take profit loss and take profit helps to avoid many problems, including large losses. Keeps you from changing your decisions under the influence of crowds or emotions
Justification for transactions - the only justification is not enough, only the fact that the price of gold has been growing for the second week and everyone around has already made money on it.
You need to clearly understand why it is growing and how long this trend will continue.
That is, we can say that in order to cope with the syndrome of missed opportunities, you must first learn, when opening transactions, to be guided only by the current market situation, verified news and only your opinion.