FOMO is popular with traders. This stems from the belief that other traders are more successful and also generates an immediate desire to succeed. A lack of long-term perspective, too high and unreasonable aspirations, too little trust or overconfidence, and impatience may result from FOMO.
The feeling of losing out, for example, can cause traders at inopportune moments to close trades or risk too much money. It can also make traders with little thought join trades.
Cause
FOMO is caused mainly by cognitive biases. This phenomenon is used in psychology to explain "the tendency of people to overestimate their ability to perceive events that have already happened when the result could not possibly have been predicted."
A trader will think, for instance, "I could have doubled my account today." In retrospect, this is obvious, but until after the transaction has been made, there is no way to understand this.
A main driver of FOMO, too, is emotions. They may contribute to trading characterized by excessive levels of risk and neglecting a trading strategy. Impatience, greed, apprehension, anxiety, envy, and excitement include common emotions that feed into FOMO.
Triggers
FOMO is psychological, but several external variables can cause it, including:
Social networks, especially Twitter. It can be toxic to be inundated with social media success stories from traders. To avoid being manipulated into making bad decisions, it is necessary to study influencers and social media posts.
Rumours and news. News and speculation influence the world of trade and this may raise the fear of being left out.
Markets Volatility. No trader wants to miss out on good opportunities and, regardless of the direction of market action, this can lead to jumping on a pattern.
Coping
It depends on vigilance and strong risk management to deal with FOMO. To help conquer the fear of missing out, the following tip may applied:
Sticking to a strategy for trading. Know your approach, build a strategy based on this approach and stick to it. A robust plan helps you react in a controlled way to market movements. It also improves trust in trading by curbing emotional trading.
Knowledge of the markets is indispensable. To make informed trades, every trader should research and understand the markets and do their own analysis.
Waiting for other transactions. You need to know that other possibilities will come along, and waiting for the right ones is worth it. Know that trading has its ups and downs and, even with a strong plan, not every trade will be a winner.
Communicate woth other traders . It can make FOMO less intense and boost trading psychology by exchanging experiences with other traders and knowing that they are in similar or relatable positions. A good place to start are trading forums and professional groups.
Maintain a trading journal. A journal is commonly used by active traders and is one of performance management's most powerful methods. Holding a log for enhanced trading and future reference helps to document and review trades. It also helps to track progress and to investigate errors.
JOMO (Joy Of Missing Out). Trading professionally involves disconnecting from the market on a regular basis to do some research, improve your trading strategy, or simply enjoy the day. This will make you less eager to miss out on trade.
In the markets, FOMO leads to psychological trauma and accepting JOMO can minimize or remove this stress. This will go a long way towards enhancing your efficiency in trading.
