Fear of missing out (FOMO)
How to Deal with Crypto FOMO?🤔
"Hey, Max, did you know you missed out on Dogecoin?" "Everyone made a fortune off it."
Many investors are terrified by questions like these. So much so that there is even a term for it: FOMO (fear of missing out). Research has found FOMO is more predominant in people ages 18 to 35🤨.
FOMO is a term that's popular in the cryptocurrency community, a market that has become associated with irrational and sometimes unsubstantiated trading decisions.
What Is FOMO in Cryptocurrency Investing?
FOMO in the crypto world occurs when a person makes an irrational decision to trade or invest in a crypto asset based on some piece of information received without properly verifying the source and or accuracy of it👍🏼.
FOMO in cryptocurrency leads people to buy assets at their highest prices or even sell them at their lowest, rather than vice versa, which would be better advised😯. Sometimes, the consequences of crypto FOMO can be worse and more profound than a loss of invested capital-it can lead to damaging situations such as disconnection from family, anxiety, and depression🤔.
Health Hazards Associated with FOMO
When a person loses trading capital in a bad investment, especially a large amount, it might affect them mentally😰.
In turn, this failure can be reflected in other aspects of their life, such as relationships, connections with family and friends, and more. The person starts experiencing social decline and gradually becomes dysfunctional if extra care isn't taken🙁.
In an 80-year study of male Harvard students on what makes a good life, the fourth director of the study, Robert Waldinger, mentioned, "The surprising finding is that our relationships and how happy we are in our relationships has a powerful influence on our health."😳
Waldinger's explanation also can be applied to crypto investing. FOMO in crypto not only can affect people's portfolios but also can translate to how healthy they are and the quality of their lives🧐.
How to Avoid FOMO as a Trader
Take the Time to Research🕒
FOMO is compulsive and driven by information received from a variety of channels. Usually, news like that isn't verified and is interpreted to suit a personal bias🧐.
Rely on Trusted Media Outlets
Conducting research gives you with an edge in overcoming FOMO👍🏻. Still, an additional helpful practice is having a list of expert individuals and media to turn to for more information. Relying on these selected media outlets and influencers as secondary sources contributes to better decision making on whether to buy or sell a crypto asset. The extra details and clarity can help inform trading or investment decisions😯.
You Can't Win All the Time. 🤔. Life is a combination of ups and downs; coming to this realization gives an investor a logical perspective and better grounding. Understanding that one can't always be in a profitable position in investing sets the tone for more wins and being able to handle occasional losses. Not even Bitcoin advocates like MicroStrategy co-founder Michael Saylor are always on the winning side of the crypto market. An crypto investor's or trader's best bet is to develop strategies that make it easy to spot FOMO😉.
Developing a Guiding Strategy
Having a guiding principle is a constructive way to get over the effects of FOMO. It means maintaining a checklist to prevent making drastic decisions or jumping too quickly on the market bandwagon. Your strategy will incorporate nuances like the use case of the crypto assets that you're considering, its tokenomics, and more. Combine fundamental and technical analysis whenever possible to shield yourself from poorly thought-out trading decisions🧐.
Know the Market Is Cyclical
The cryptocurrency market, like others in the financial world, moves in an up-and-down cycle, with bullish and bearish periods😯. The bull market comprises a series of price highs, and the bear market comes with lows-and with people losing money🤑🛑. Understanding this cycle will help reduce the risk of being driven by FOMO, when you can recognize the right time to enter and exit a trade💲.
The Bottom Line
Forms of FOMO have been a part of human existence long before cryptocurrency was invented. With cryptocurrency, it can be detrimental because of the potential for losing an entire investment. Following guidance with discipline can help investors avert the danger and influence of cryptocurrency🤔😉.
If you guys are reading this you are definitely willing to become a successful trader so do follow, like and leave a comment and do support because thease article take a lot time to write and edit.
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