Trading and FOMO - Fear of Missing Out

I like to think of myself as calm and collected, but the truth is I’m not as level-headed as I would like.

When Pfizer’s vaccine was announced, I rushed to buy “recovery” stocks. I had to placed “market orders” to get part of the action, and, as a result, paid more than I would’ve if I’d waited a couple of days for prices to fall a little. I’m not hugely under-water, but I gave in to my emotions and fear of missing out. This isn’t the first time it’s happened.

In my opinion, the best way to make money is to take a contrarian view on the market: buy at a good price when others are panicking, and sell when others get a carried away with euphoria. This approach has worked very well for me.

So, I’m curious to hear how others keep their FOMO in check, and stay on top of their emotions.

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Whenever I get that FOMO feeling I just tell myself that it’s already too late…

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Yes same here.

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I like to use a strategy, one strategy is all I need really. I made it myself so I know it inside out. Whenever price isn’t right or a candlestick is slightly out of place I always say to myself “Trust the process!”

It is very hard when you see a missed opportunity and you think “Well even if I am a little late, what’s the worst that’s going to happen”. This mentality will bite you like it did for you, always remember that there are a lot of trading days. Preservation of wealth is the first step to growing wealth in my opinion. No house lasts long if its own foundations can hold up.

You may also have missed out on a huge loss don’t forget. Trust the process, it will go a long way :slight_smile:

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Trading is an emotional game. So whenever my FOMO feeling is awakened I meditate.

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We can be our own worst enemies blaming ourselves, when we wouldn’t blame others, would we? We are allowed to make mistakes and be compassionate to ourselves if we get it wrong.

Best remedy is to go out and celebrate our life. That’s what I do, Works wonders after a few pints…

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That’s a good approach.

Oh thats nice to hear. Does that help each time?

This is a superficial view of stock markets. Buying because prices are lower than they have been is not a cure for FOMO, it is just another symptom of the same ailment.

Its so funny how trading shows us the person we really are rather than the person we think we are. There is a benefit in that and we can improve ourselves while learning to trade

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There are plenty of more fish in the sea.

Fear of missing out on a “huge loss”. That’s brilliant, and yes, really does put things in perspective.

I’m working on this. It’s really difficult. If a pair is ranging, I’ll wait for the bounce, but sometimes I’ll just place an order.

There were times I was late to the party and tried to jump in during a pullback. It doesn’t end well always.

Same for swings. Jumping in during pullbacks are risky. I’m trying to teach myself how not to trade, and just lwt it go—no matter how confident I am in where price will go.

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FOMO-

-no one could avoid # FOMO at a certain point of trading. Whatever you folks say, it is not possible at all to avoid it. It comes beyond you. You may write down in front of your trading desk, to read and remember it. Could help, may be.!

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What is FOMO anyway?
Think about it.

All it is, is you chasing after the market. Seriously.

  • Something’s happening with price action. Probably with some kind of volatility.
  • You get the emotion of wanting a piece of the action.
  • This makes you get in a trade.
  • The results almost never pan out the way you want.

Well then, isn’t this trading? I mean, what else is there?

How about following a trading plan. 2 key words in there.

FOLLOW — You have a pre determined plan of action. Action, reaction.

TRADING PLAN — A pre determined set of rules that govern how you trade.

And the common denominator with all that is predetermined.

What separates a discretionary trader from a mechanical trader is precisely that…emotions.

So. Be honest with yourself. If you think you can trade and not be affected by your emotions, you truly are deceiving yourself. The only way to not fall trap to the FOMO emotion, is to be as mechanical as possible.

Well, there is one other way you get around (through) that trap.

It’s called experience.

The more years you put in. The more mundane trading becomes. The more you get used to knowing how the market moves, the more you don’t even have to deal with that emotion, to begin with. You just do what you do. Make the necessary adjustments when needed, and take care of business. That’s all.

In fact, I think that very thing, FOMO, is the gauge that tells you how mature, or immature you are of a trader. The more it grabs you, the more inexperienced of a trader you are. The less of an issue it is to you, the more you know you’re becoming a real trader.

You know why? Cause a professional, retail trader, is way more concerned with other pressing issues, than FOMO. Like :

  • Consistency issues
  • Long term results (as opposed to short term ones)
  • Building the business stuff

Don’t worry. Every single trader will have to learn the traps of the market. And this one emotion, is just one of them. Don’t worry. Your experience will pay off, in the long run. In the meantime, the best thing you can do is simply recognize this emotion inside of you. Face it head on. Realize you are feeling this way. Think about what your plan, strategy, is. Follow that, and not your emotions.

It’s all about becoming a (real) trader.

Mike

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Back some years I remember a guy teaching about the market.

He was trying to get across how not to chase either ahead or after price. He figured that mostly younger and maybe less experienced guys tend to do this - usually caused by fomo.

His advice stuck with me - price, he countenanced, is like an old person getting of the bath - he’ll do it gradually, maybe get back in awhile then, slowly and determinedly he get’s out.

i’ve paraphrased but that was the jist of it :slight_smile:

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What about FOMO guys ?

I experience that a lot. Meditation helps sometimes though.