FOMO – what is it in cryptocurrencies and how to avoid it?

Communication in social media has given rise to new abbreviations and acronyms. FOMO is one such concept.

Fear of missing out (FOMO) refers to the fear of missing out on something valuable.

What does this mean in trading, and how can one avoid falling into this phenomenon?

What is FOMO based on?

The concept of missing out has existed throughout human history, but FOMO has its distinct characteristics. Modern traders constantly monitor trading terminals on their personal computers, while also receiving trade signals and important information on their smartphones.

Media personalities, daily trends, and the rapid shift in the information landscape affect the trader's mindset. They fear being left behind and succumb to impulsive actions. For example, a Twitter post announces a new token dedicated to adorable corgi dogs. An emotional trader allocates a portion of their balance to the promoted token, only to lose part of their savings the next day. By opening the trade, the trader feared missing out on extraordinary profits from the latest token. However, the trade resulted in significant losses. This is how FOMO can be described.

How to avoid falling victim to FOMO?

Only self-discipline can protect traders from impulsive purchases after hearing about the listing of the next "popular coin." Experts recommend studying the classical works of traders from the past century, which describe the long and exhausting trading in the exchange pit. It is these traders who provide advice on financial discipline in their books. They claim that a trade should be carefully considered for hours or even days. Sometimes it is worth postponing a trade if there is no confidence in its outcome.

It is important to create your own trading plan and stick to it, ignoring the momentary trends on social media. The fear of missing out syndrome is more common among individuals under 30. However, significant financial losses can teach people, and it is better to learn from others' mistakes and develop stress resilience and trader discipline.