FOMO (Fear of Missing Out)
FOMO, known as “fear of missing out”. This happens everywhere, even in the crypto world. Learn finance terms and keywords here.
FOMO in the crypto world
In the crypto industry, “fear of missing out” (FOMO) is a popular phrase. What does the acronym FOMO stand for? Are we able to avert it?
Originally, the term “fear of missing out” (FOMO) refers to the sense of worry that arises from the realization that other people are enjoying a pleasant or unique experience while you are missing out. It is a phenomenon that is extremely widespread on social media, with people’s feeds frequently spotlighting and accentuating the good and rewarding aspects of their life, causing the viewer to feel depressed or inadequate about their own experiences and circumstances.
In the cryptocurrency landscape, FOMO, or “fear of missing out,” is a trader’s feeling of concern when they see a significant spike in the price of bitcoin or other altcoins. 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 climbed considerably, it appears to be a good time to buy. As a result, most traders sell coins at a lower price to purchase them at a higher price.
How to overcome FOMO in crypto trading?
Investing based on fear of missing out rather than on logic and reasoning may encourage investors and the market as a whole to make investment decisions using emotion, not reason. Because of this, there is a larger chance of financial losses, and the asset may experience a bigger bubble.
FOMO, however, is often used as a marketing tactic to manipulate investors into making decisions.
How do you get over the fear of missing out? Oftentimes, it can be a difficult task to eradicate FOMO. Before deciding whether or not to invest in cryptocurrencies, it is important to conduct your study, formulate trading rules, or set loss/profit limitations.
Don’t always expect profits
It is not uncommon for traders to get so afraid that they cannot control their impulse to jump on a cryptocurrency bandwagon or hype train before it is too late. There are occasions when anxiety could prompt you to prematurely join the upward trend. Sometimes, it forces you to make a tough choice between conceding a loss or keep on waiting for the silver lining.
For those times when the impulse to step in gets you into trouble, just keep in mind that you don’t always have to make profits. As a crypto trader, you should always keep tabs on recent cryptocurrency market trends and be on the lookout for profits and losses. Sometimes, resisting an impulse or an emotion could help prevent you from a major misfortune.
Stay calm and take it slow
In the world of digital currency, manipulation is a frequent occurrence. Whales have the power to inflate the price of a cryptocurrency and dump or sell it. When prices drop, those who worried they would lose out on the recent increase in value are exposed to losses.
As a rule of thumb: Never let FOMO take over.