FOMO is an acronym for Fear-of-Missing-Out, and it is one of the worst investment planners ever. This type of fear, in addition to making many people’s lives miserable, leads to serious mistakes.
This is especially true when it comes to cryptocurrency. In this article, we will discuss what FOMO is, and some strategies for reducing or avoiding FOMO in cryptocurrency trading and investing.
What Is FOMO
The term “fear of missing out” (FOMO) originally referred to the anxiety caused by the realization that other people are having a pleasant or uniqaue experience while you are missing out.
It’s a common occurrence on social media, with people’s feeds frequently emphasizing the positive and rewarding aspects of their lives, leaving the viewer feeling depressed or inadequate about their own experiences and circumstances.
FOMO, or “fear of missing out,” is a trader’s concern in the cryptocurrency landscape when the price of bitcoin or other altcoins rises significantly.
When the price of a cryptocurrency fluctuates greatly, a trader may notice a price movement that appears to be a favorable signal for a specific coin at an earlier time.
When the price has already risen significantly, it appears to be a good time to buy. As a result, most traders sell their coins at a loss in order to purchase them at a profit.
How to Identify FOMO: Basic Symptoms
You are probably a FOMO trader if you often tell yourself the following things:
- So many people are buying this coin. They cannot all be wrong — there must be something to it.
- It would be silly not to try. Let’s see how much money I could make.
- I should have guessed the price would rise!
- These people who buy this coin… They must know something I don’t.
- If the coin will grow big, I will never forgive myself for missing this opportunity.
As you see, FOMO traders tend to follow the crowd and make decisions based on greed and guessing. Just like the gold-diggers of the past.
How to Overcome FOMO
Once you have identified the problem, let’s see how to deal with it. Below are 8 tips that might help you keep your money safe and restore peace of mind.
Analyze the Mistakes You’ve Made Due to FOMO
Every FOMO trader has a history of failures he or she prefers to ignore. We recommend you revise this history to understand that FOMO is responsible for losing (and not earning) a lot of money. As with any deeply-rooted fear, it makes us act fast and without thinking.
It’s one of the simplest ways to eliminate or reduce FOMO. Have you recently spent too much money on cryptos in the hope that they will one day go “to the moon”? Then you most likely require a mental detox. Try taking a break and doing something else interesting.
Remind yourself that life is more than just making money and planning for the future. Bring your attention back to the present moment by playing a game, working out, or going on a short trip with your friends. Slowing down helps you overcome anxiety, which causes you to act quickly (and make mistakes).
Realize That Losing Is Part of the Game
To overcome your Fear of Missing Out, recognize that there is nothing tragic or shameful about passing up an opportunity now and then. Actually, it’s a normal part of any trader’s experience, especially if you’re new.
You should also understand that, while most traders prefer to share their success stories and keep their losses to themselves, they have all lost money. It’s difficult to predict what will happen to the price tomorrow in this market. As a result, losses are unavoidable.
You can only reduce them by sticking to your trading strategy.
See Statistics to Get the Real Picture
Many inexperienced traders and investors are captivated by the stories of BTC and ETH. As a result, any coin marketed as “a new Bitcoin” appears to be a one-of-a-kind opportunity to amass wealth.
All you require is a healthy dose of reality. See some statistics to realize that there are hundreds of shitcoins for every BTC or ETH. To attract FOMO-driven investors, each of them pretends to be revolutionary or innovative. That doesn’t change the fact that more than 80% of ICOs were fraudulent.
Remember That Your Subconscious May Be Wrong
When it comes to making money, many beginners tend to listen to their guts rather than their brains. If you have a “gut feeling” about a coin, resist the urge to buy it right away. Our well-meaning subconscious occasionally hijacks our reality and forces us to make poor decisions. FOMO, as previously stated, is also a basic instinct.
It’s similar to dieting in some ways. Instead of listening to your body, follow your nutrition plan to become healthier. That probably means, “I’m sure this doughnut will make me feel a lot better.”
Explore the Cases When People Lost Everything Due to FOMO
Instead of focusing on success stories (which happen less frequently than you think), use Google to learn more about major losses. Join a trading forum and ask members to share their bad trading experiences. Learn more about the ICO boom in the aftermath of Bitcoin’s massive price increase and its consequences.
This study could be eye-opening. You’ll see that the success stories that are causing FOMO are only the tip of the crypto iceberg. It’s difficult to estimate the size of its underwater portion, but it’s significantly larger.
Read About FOMO-Based Scams
The pump-and-dump scheme is one of the most well-known types of FOMO scams. To cut a long story short, the group behind the scheme causes the price of some shitcoin to skyrocket. It attracts a large number of FOMO traders who believe they have discovered the “next big thing.” When the price reaches a certain threshold, the scammers sell their coins and profit handsomely at the expense of other players.
Unfortunately, scammers employ a variety of methods to defraud people of their money. Most of the time, they use their fear of missing out to achieve this goal. Knowing this fact can help you avoid many honey traps.
Realize That “What Ifs” Will Take You Nowhere
Many people who are afraid to miss the next big thing, cannot forgive themselves for not buying Bitcoin or Ether at a low price. They keep thinking of how rich they would be if they had identified this opportunity. As a result, they try to correct this mistake again and again.
To break this destructive pattern, remind yourself that thinking about what could have happened is a total waste of time. By the way, among the world’s top Bitcoin millionaires and billionaires, there were few random people. Mostly, these early investors had a background in finance, fintech, or programming. In its younger days, cryptocurrency was widely seen as a financial tool for geeks, too complicated for an average user.
As a result, for many men who now regret not purchasing bitcoins in 2011, the barrier to entry was actually too high. Even if they had purchased or mined bitcoins at the time, they would have most likely spent them on a pizza. Or they would have been sold when the price reached $100.
In that light, it would be better to stop wondering “what if” and start learning. The more you learn about cryptocurrency investing and trading, the easier it will be to identify coins with real value.
Benefits of FOMO in Crypto Trading
When crypto investors and traders see a bull rally in a coin or token they have yet to acquire, they frequently experience the fear of missing out on a profitable opportunity.
As previously stated, the feeling usually prevails when the value of a cryptocurrency rises significantly in a relatively short period of time. There is a chance that the FOMO feeling will drive a trader to capitalize on the opportunity to make a good trade. As a result, fear of missing out has some advantages in crypto trading.
One undeniable advantage of the fear of missing out in crypto trading is that the sentiment iterated among the feeling of missing out on a trending asset is most likely to cause a pretty acceleration in the price of the asset, giving traders and investors the opportunity to profit.
This also implies that traders and investors may benefit from the fear of missing out on good buying and selling opportunities. If properly leveraged, the fear of missing out on something that appears to be providing others with a wonderful experience could become a reality of becoming a participant in that wonderful experience.
Furthermore, fear of missing out is advantageous to cryptocurrency trading because it frequently serves as a good guideline for traders, offering them a good trading experience driven by FOMO.
Side Effects of FOMO
In as much as fear of missing out could yield certain benefits to traders and investors, it has often proven to not be ideal. Thus, succumbing to the feeling of FOMO in trading and investment practices could lead to tremendous consequences.
Therefore, the effect of FOMO on finances often turns out negative especially when it comes to trading or investing under its influence.
As it sees people having to irrationally think when they are at the crossroads of making important financial decisions. Hence, they end up making unreasonable decisions which could lead to a significant loss of funds. Also, traders are most likely to end up making unreasonable trades.
To overcome FOMO, we recommend that you learn everything there is to know about the cryptocurrency market, including its pros, cons, and pitfalls. Also, be aware of how your instincts can fail you when dealing with complicated situations.
These eight tips should help you control your FOMO, the king of emotional trading. Please leave a comment if you found this article useful.