Fear of Missing Out (FOMO) - what is it?

Fear of Missing Out (FOMO) refers to the fear of traders and investors of missing out on profits due to late or missed decisions.

Due to the high volatility of each digital coin, the cryptocurrency sector is an excellent opportunity to earn profits. Still, there is also an equally steep risk of losing profits and accumulated capital. One of the concepts that comes up in this market is FOMO. Typically, FOMO is inherent in every sane person. However, if the fear of lost profits can already be equated to obsessions, then we are discussing a syndrome that must be fought and done correctly.

How to fight FOMO?

First, when planning any transactions, it would be a good idea to focus on statistics on the market's fear and greed index. This determines the increased fear of lost profits, inflated expectations, or an insufficiently competent analysis of the selected assets and the prospects for working with them.

If you take into account individual character traits, then you should adhere to the following rules so that FOMO does not have such a strong impact on decision-making in trading and investing:

  • You can't make all the money - this is the principle that every participant in the cryptocurrency market should have as a basic condition for activity. That is, even before choosing assets and strategies for trading them, you need to accept that financial drawdowns are inevitable, but colossal profits in this niche are also real.
  • It is always necessary to make informed decisions and conduct the most complete analysis of the market and the prospects for growth or decline in the prices of various assets. You shouldn't make decisions just because the majority in the market does so. It is better to take a pause, rationally assess all the risks, and ensure that there is no bubble or other signs that the asset's value does not correspond to its real value.
  • Determ
  • ining the acceptable degree of loss at which an asset is sold, regardless of publications in the media.
  • Trading strategies should correspond to the size of the starting capital, and the number of transactions should be such that the fear of lost profits does not ultimately lead to a complete loss of capital.

It is imperative to always adhere to generally accepted rules of risk diversification. Only with constant analysis of the market, study of statistics, and graphs of price growth and decline can one avoid the fear of lost profits.