The fear of missing out is one of the most potent psychological forces affecting cryptocurrency trading. The concept of FOMO refers to the stifling anxiety of missing out on gains. This feeling is most common when there is a rise in value over a short time.
FOMO is especially dangerous for investors taking emotional decisions instead of using their reasoning and logic. This can lead to an asset being overpriced and greater risks of losses. An example of the impacts of FOMO is the rapid fluctuation of Bitcoin prices in 2017.
While FOMO is not always bad, you should never use it as your only reason to trade crypto. There are several solutions to help you ignore this feeling to make rational decisions.
Below, we gathered the 10 best solutions to FOMO that will save you thousands of dollars down the line. And if you’re scared to miss out, read on!
1. You Are Bound To Miss Out. Make Peace With It.
Missing a chance is not a cause of shame. Actually, it’s an inherent element of trading, particularly for someone new to cryptocurrency. However, you hear more about success stories because we like to speak more about our wins than our losses.
You should realize that sometimes missing out on an opportunity helps you manage your fear of missing out. Changing your perspective from the shame of missing out on learning from this experience is one of the best crypto lessons.
Besides, it’s difficult to forecast how the price will change tomorrow in this market. Losses are thus unavoidable. The only thing you can do to reduce them is to stay true to your trading plan. The sooner you accept that losses are inevitable, the quicker you’ll grow as a trader.
2. Take A Break
One of the best ways to reduce your FOMO is to disconnect. If you spend too much time thinking about your potential crypto gains, it’s time for a mental detox. Try focusing on other aspects of your life instead.
You should remember that achieving financial freedom is only one facet of your life as emotional investing will not provide the results you are looking for. Emotional investing often happens when your financial and psychological interests are too closely correlated.
Recognizing that a financial stake is proportional to your emotional condition is one of the most well-known causes of emotional trading. Invested assets are seen as more than just cash; We view them as what we may use these funds for, such as the repayment of current debt. This mentality is very risky for your own mental health and crypto portfolio.
3. Do Your Research
No one can foretell the future, so never take someone else’s advice as more valuable than doing your study and drawing your conclusions. Influencers and media may try to influence the market by creating FOMO. Therefore, always check with several sources while learning about the most recent developments in the crypto industry. A good place to start would be the 9 cryptocurrency types and their uses explained.
If you are not a skilled trader, you should understand how to value-examine cryptocurrencies by looking beyond their price. Unfortunately, it’s not as simple as analyzing the stock of a corporation. No cryptocurrency has a price-to-book value ratio that can be checked.
The network value to transaction (NVT) ratio is one approach for figuring out a cryptocurrency’s “fundamental” values. Still, it’s a bit too complicated to grasp and hasn’t been tested for a long enough period.
To locate a successful cryptocurrency investment with solid foundations, you need to know the answer to one simple question: “Will companies truly use it?” Considering that anybody may purchase and retain a cryptocurrency asset, its scarcity and value will increase.
However, usefulness, as well as scarcity, should be considered when determining value. Ether has value since it was the first coin to drive a blockchain that can be used in decentralized applications.
4. Analyze the Statistics
Traders should always examine the charts first. Look at the chart from the day, week, or month before. Charts are reliable sources of information regarding a cryptocurrency trend, as opposed to cloud-based sensations.
The tales of BTC and ETH inspire many novice traders and investors. As a result, any currency that calls itself “a new Bitcoin” seems like a special chance to make money.
However, you should remember that there are hundreds of worthless coins for every Bitcoin or Ethereum. To entice FOMO-driven investors, each presents themselves as revolutionary or inventive. That doesn’t change the fact that scammers accounted for 80% of ICOs.
When making investments, many traders prefer to follow their intuition. If you have positive vibes about a coin, try to hold off on buying it right away. Keep in mind that FOMO is an instinct. Before investing, take some time to review the token’s whitepaper documentation and performance data. Always do your own due diligence before making any investment.
5. Read Testimonials Of Losing Due To FOMO Crypto
Learn more about the instances of significant losses rather than focusing on success stories. These are less common than you would believe. You can join a trade forum and invite the participants to discuss their unpleasant experiences or learn more about the ICO boom that followed Bitcoin’s sharp price increase and its effects.
You’ll soon realize that the cryptocurrency success tales giving you FOMO are only the tip of the iceberg. It is hard to estimate how large its underwater portion is, although it is much greater.
On the cryptocurrency market, there are more than 3,000 digital assets. Some of these were formerly promising cryptos, but they are now free. For example, investors and cryptocurrency traders may have experienced FOMO Crypto during the “ICO frenzy.”
During fraudulent ICOs, several individuals lost thousands of dollars. If you don’t want to be disappointed again, consider calmly before buying a ‘hot asset.’
6. Learn About FOMO Crypto-Based Scams
The pump-and-dump scheme is one of the well-known frauds operating on FOMO Crypto. The organization responsible for the operation dramatically raised the price of some worthless currency.
It drew a lot of fear of missing out on traders because they thought they had found the “next great thing.” The con artists sold their coins when the price reached a predetermined level and profited at the cost of other gamers.
Regrettably, con artists use a variety of strategies to defraud individuals of their money. Most of the time, they achieve their purpose by taking advantage of people’s FOMO. By thinking logically and doing your research, you can easily avoid their scams.
Moreover, in the social media age, cryptocurrency trading has become popular. This has caused a strong social media culture of cryptocurrency advisers, bulls/influencers, and more seasoned advisors to appear on websites like YouTube. It is easy to discover at least one excellent review of at least one significant currency by immediately searching online.
Some of them come from what seem to be more knowledgeable sources (such as the Coin Bureau and Michael van de Poppe), while many others are wholly speculative, incorrect, and sometimes deceptive since they omit crucial facts.
With this large influx of information, you are not the only one to have lost out on a lucrative chance. There is no need to worry about it since alternative investing possibilities based on your calculations and instincts will assist you to gain.
7. Assess Your Mistakes Made Due To FOMO Crypto
Every FOMO trader has a track record of losses that they would rather forget. To really grasp how much money you lost (and did not make), we advise you to go back and review your history.
Think back to the last time that this fear struck you. How did you act? Did you succumb to it? What were the outcomes if so? You might avoid making disastrous errors today thanks to your prior knowledge.
You also need to understand your emotional inclinations. On social media, there are many people who are interested in cryptocurrencies. Some only attempt to advertise their investment currencies to increase demand, while others have the noble goal of educating the public (and price).
But this is just a side effect of the free market. Your inner emotions and temperament are your true adversaries, not the crypto community. You should learn to halt before you purchase if the recommendations of social media cryptocurrency gurus and traders easily mislead you.
8. What-Ifs Will Lead To Nowhere
Many traders, who are scared to miss the next great thing, feel guilty for not purchasing Bitcoin or Ether when they were cheaper. They often imagine how wealthy they would be now if they had recognized this chance. As a result, they keep attempting to fix this error.
However, remember that speculating about what may have occurred is a complete waste of time in this vicious behavior. While trading may appear like a good solution for FOMO, some investors are not concerned about the coin’s underlying worth, applications, and potential future effects. This also does not require too much knowledge of cryptocurrency to make some profits.
However, investing is not always emotionally fulfilling. There will always be trials when trading crypto. To maximize your ups, you need to be dedicated to the long-term game. Hanging onto your asset, regardless of the market price, might be one good strategy for successful investing.
On the other hand, investing is not necessarily emotionally fulfilling. There will be moments where you believe you are correct, as well as times where you believe you have been completely mistaken.
Strong dedication and the capacity to hang onto your asset regardless of the market price at any moment are necessary for successful investing. This is because the cryptocurrency sector is not suitable for the subjunctive mood. The market’s extreme volatility does not back up all projections by crypto gurus. Instead of regretting lost possibilities, develop your own winning plan using your knowledge and abilities.
9. Diversify your Portfolio
In order to diversify their portfolio, most astute investors will decide to keep a variety of assets for an extended period, from alternative cryptocurrencies to stock market index funds. Cryptocurrency is frequently quoted as not sleeping as the cryptocurrency markets are notoriously volatile,
Therefore, cryptocurrency investors should plan out their trading strategy, and their entry and exit points. Even if you had insider information, a black swan occurrence, hack, or tweet from a well-known person might send values plummeting. This is why it’s so important to prepare in advance and to take action to reduce your losses in the event of a rapid fall.
One example to diversify your portfolio is to use set tactics like dollar-cost averaging, which allow buyers of cryptocurrencies to avoid trading on emotion or having to keep their eyes glued to the charts. Dollar-cost averaging is the practice of purchasing or selling modest quantities often.
Buying ETFs in the stock market can also be a good backup plan for your portfolio. Some crypto traders have also invested in real estate to diversify their assets. By having different shares in various markets, you are still confident despite some crypto losses.
10. Only Trade Within Your Limits
Remember the golden rule of every shrewd trader: if you choose to trade a cryptocurrency that everyone is discussing, trade with money you’re not scared to lose. If you do not trust yourself, a limit order can add a level of security.to your funds.
A limit order is an order set at a specific price. The buying order can only be executed at the limit price or lower, while sell limit orders are done only at the limit price or higher. This concept allows you to have better control over the prices you trade. Even if the price is guaranteed, limit orders are not accepted until other order qualifications are met. In contrast, a market order is traded at the prevailing market price with no limits.
Another way of ensuring that you trade within your limits is to use your revenue after paying all your necessities and savings. This ensures that if ever the money is lost, you are still set for the month.
Taking abrupt decisions based on emotions is definitely a bad idea. After all, trading is all about analysis, yet FOMO is all about overthinking. To protect yourself from falling into the traps of listening to the “Wall Street Bet Bros”, always do your own analysis and always invest money you can afford to lose. How has that been going for you so far? Share your fomo in the comments below…