Many financial markets are familiar with FOMO or have heard it. If you want to be successful as an investor or trader, you need to be familiar with market terms and definitions. What is FOMO? This article explains FOMO and its effect on financial markets. In addition, we will explain the methods of dealing with FOMO, which is essential for any market activist. If you are also trapped in FOMO, we suggest that you go to the “What is self-confidence? Best ways to improve it?” article to find ways to deal with FOMO consequences after reading this article.
What is FOMO?
FOMO is made up of Fear Of Missing Out, which means fear of losing something or some benefits in advance. However, you may have figured out the literal meaning of the term for it. From different financial markets, it is FOMO that people are afraid of being left behind or lagging. The person who suffers from fumigation thinks that there is an opportunity, and if he does not use it, he will fade in the benefit to others.
The term is not specific to financial markets and is also used in everyday social issues. Some experts believe that the widespread use of social media is associated with the possibility of developing FOMO. For example, you may constantly think you have a message and need to respond. This reflects the FOMO prevalent on social media today. Now that we discovered what is FOMO, we can explore different sides of it.
Fear of missing out (FOMO) is the feeling of apprehension that one is either not in the know or missing out on information, events, experiences, or life decisions that could make one’s life better. FOMO is also associated with a fear of regret, which may lead to concerns that one might miss an opportunity for social interaction, a novel experience, a memorable event, or a profitable investment. It is characterized by a desire to stay continually connected with what others are doing, and can be described as the fear that deciding not to participate is the wrong choice. FOMO could result from not knowing about a conversation, missing a TV show, not attending a wedding or party, or hearing that others have discovered a new restaurant. FOMO in recent years has been attributed to a number of negative psychological and behavioral symptoms.https://en.wikipedia.org/wiki/Fear_of_missing_out
What is the impact of FOMO on the financial markets?
There are investment opportunities in all financial markets, and traders and investors seek to make the most of these opportunities. FOMO occurs when a person intends to invest in an asset not to miss the opportunity. It may not be a profitable asset, but FOMO has attracted attention in this case.
The media play a significant role in creating FOMO. The news strongly influences inexperienced people or those who do not control their emotions and do not know what is FOMO!.
For example, there may be a lot of news about a particular stock or Cryptocurrency, and you constantly hear about its profitability and bright future. In this situation, with the influx of people towards these assets, the market grows like a bubble, and after the bursting of this bubble, we will see sudden falls.
The more a market grows, the more people are likely to be attracted to it, and as a result, the market growth cycle becomes more and more intense.
Under these circumstances, if the market or asset in question has no intrinsic value, the large amount of liquidity that has entered it will cause its price to rise falsely, and for this reason, many investors who have made good profits will leave and therefore fall. Now that we learned what is FOMO and What its impacts are, it’s time to talk about the consequences.
What are the consequences of FOMO?
The consequences of FOMO are related to financial markets and your personal life. If you constantly think that you will lose a good profit and worry about it, your daily life will be disrupted. Sleep disturbance, lack of life satisfaction, and stress are the results of FOMO.
Do you know the share of trading breaks due to FOMO? Without proper planning and capital, and risk management, you will fail if you enter the financial market. Even if a property is precious and its price growth is real.
One of any financial market principles is that there is always an opportunity, and if you think you have missed an opportunity, you are probably in for a treat. Training and planning help you take advantage of the opportunities available, and you must remember that no one can take advantage of all the opportunities available in the market.
Feelings of regret and frustration are only to your detriment. Another principle of the financial market and investment is protecting and managing your capital, not regret not taking the opportunity. If you look at it correctly, the missed opportunity will increase your knowledge and experience to identify future opportunities. After this all, you should thoroughly know what is FOMO and what it can do with you.
What are the symptoms of FOMO?
If you do not want to get fumigation, you need to know the symptoms because many people have this problem unintentionally. The following will help you identify FOMO.
- You always say yes? sometimes you need to say no to some deals and think again about the situation.
- If your friends talk about their vast profits, it should not provoke you.
- If you think your life is not good enough or are not taking advantage of the available opportunities, you are probably suffering from FOMO.
Follow the instructions below to control FOMO:
- Have a trading table and write down your trades in it.
- Have a trading plan and move within it.
- Have a daily plan and dedicate the hours you think are best to the deal.
- Learn how to control your emotions.
Try to rely on yourself and learn from past mistakes. In addition, you should use the knowledge and experience of other people and apply it based on your circumstances and strategies.
In this article, we explain what is FOMO and its effect on financial markets. Fear of losing profits causes people to suffer both financially and socially. That’s why you need to plan to control your emotions and have a trading strategy.
In addition, always remember that there are other opportunities. This perspective allows you to make decisions with more control over yourself. If you have any experiences with this, you tell us what is FOMO and what did you experience with it. What is your idea about this?