The crypto term FOMO stands for "Fear Of Missing Out". This feeling is familiar to every participant of the cryptocurrency market. Some of them feel only mild discomfort, while others make irrational decisions that lead to money losses.
In this article, let's analyze the FOMO phenomenon, what it is in trading, how it manifests itself and how to deal with foregone profits syndrome.
The term was introduced by psychologists and is used in different spheres of life. But with the popularization of the financial markets it has taken on new hues. The most striking example of FOMO in cryptocurrency is the events of December 2017:
- The price of Bitcoin soared by a thousand dollars every day.
- Bitcoin seemed to be talked about everywhere - at work, on TV, on social media.
- People who had never bought cryptocurrency lamented the missed opportunities.
- Some believed that growth was still a long way off, and were afraid of missing out at the next stage of growth, so they bought the strongly rising asset.
This is one of FOMO in crypto manifestations. Bitcoin grew up, and many people tried to "jump on the latest bandwagon". Buying an asset with a price that has surpassed all-time highs by an order of magnitude is a high-risk decision. At any moment, the growth can be followed by a decline. We will have to sell at a loss, or wait for the price to return to its previous value for months or even years.
However, FOMO also has its effect on people who bought the asset when it was much cheaper than the current price points. Many of them do not sell the cryptocurrency, believing that the value can continue to rise. This may continue until the price collapses. After that, the person who was afraid of missing out on additional profits loses much more. He will now regret not selling the asset in time.
If you notice that you
- want to buy a cryptocurrency that recently has risen in value a lot;
- can't sell the cryptocurrency at a profit, because it seems that the price will rise even more;
- constantly monitor the news background to be the first to buy an asset that is about to rise;
- are afraid of missing something important, so you spend much time in chat rooms and other cryptocurrency communities.
So you're experiencing FOMO. To avoid getting into lost profits syndrome, keep in mind that:
- There will be other opportunities. A newcomer to the cryptocurrency market, influenced by a blogger or the media, may think he or she has found the "deal of the century." It may seem that if you don't buy a particular cryptocurrency right now, the chance to become rich will be lost forever. However, this is simply not true. These opportunities to invest successfully have been, are, and will be.
- Emotions are a market player's worst enemy. Focus not on feelings, but on facts. If you really want to make a deal, but you can not explain why you need to do it - it is better to give up the idea.
- It's important to stick to a plan. Determine in advance at what price you will buy or sell cryptocurrencies. And then…follow the plan. In this case, HODL can be regarded as a strategy for reigning in FOMO. It's better to sell with a profit of 30%, than to see a profit of 50% "on paper", but not to realize it, and go in red after the price crashes. If you make a plan ahead of time, what and when to do, and manage not to deviate from the planned strategy, you will not fall for FOMO.
- Buy when the price is low, and sell when the price is high. It seems to be simple. In practice, it's very different. When the price falls, it's scary to buy: "What if it falls more?" When the price goes up, you want to buy: "It'll go up again, and I'll have time to sell!" But individuals that buy cryptocurrencies when everyone else sells them (and sell them when everyone else buys them) are the ones making money. Consider this as you make your own plan.
Experienced members of the cryptocurrency community are well aware that FOMO is present both in trading (as they call frequent selling and buying of assets, i.e. speculation) and in long-term investments. You can't get rid of the syndrome completely, but you can control it.
For market participants for whom "FOMO" and "cryptocurrency" have become inseparable concepts, psychologists have prepared a number of recommendations. If you monitor currency rates, Telegram news channels from morning till night, and are looking too actively for new opportunities, try this:
- disable notifications from cryptocurrency channels, and enter them once in 2-3 days, or better, once a week, to get to know only important news;
- establish a rule: check your charts no more than twice a day - morning and evening;
- don't deal with cryptocurrencies (read news, make deals, plan purchases) before going to bed, and especially don't do it in bed with a smartphone in your hands;
- make sure that cryptocurrency news doesn't intrude into your life when you are working, resting, chatting with friends or relatives.
A person who is used to feeling FOMO and watching the news 24 hours a day will have trouble changing his lifestyle. He will be constantly drawn to check balances and charts, read the news, and chat with other market participants. However, if you give it up gradually, and sometimes allow yourself a strictly limited time to satisfy these desires, over time the situation will improve.
To avoid experiencing FOMO, you need to buy cryptocurrency consciously. However, you also need to be conscious in choosing a platform to help you conduct transactions. By choosing an unreliable exchanger, you risk losing money.
But how do you find a reliable exchanger? One way is to trust only exchangers that have an official license, obtained after passing the tests of regulatory bodies. Broex is just that kind of exchanger.
The company that runs the exchanger is officially registered in Estonia. It passed all the stages of inspections, and received a license to conduct activities related to cryptocurrencies. This has made Broex a 100% legal exchanger. This means that there is not a single reason to doubt its reliability.
Broex is not only an exchanger, but also a custodial wallet. This means that you can trust the company to store your own cryptocurrency. You won't have to:
- master third-party wallets;
- worry about the risk of losing wallet passwords;
- waste time on transferring cryptocurrency back and forth.
Once registered, you'll have a personal account where you can quickly buy and sell Bitcoin and other cryptocurrencies. Trust Broex to store them between transactions.
Another great feature is the availability of a mobile app. You don't have to use a PC every time you want to check your balance or make a transaction. Wherever you are - at work or at school, at home or on a walk - the main thing is to have a smartphone in your hands. This is enough to perform any action on your personal Broex account, as the app copies all the features of the website.
Broex also provides:
- Simple interface. There are no redundant functions, so you can make transactions quickly and easily.
- Low commissions. From 0.1% per transaction.
- Opportunity to invest from 1500 rubles. The minimum deposit size is chosen so that everyone can buy cryptocurrency.
- 24/7 technical support. Any questions can be answered in chat in just a minute or two.
- Instant replenishment. You can deposit money with your bank card (in any currency) or through AdvCash.
Sign up to buy and store cryptocurrency with Broex - it won't take more than a few minutes.