What you must Need to know about FOMO (Fear Of Missing Out)
Updated: Jun 3, 2021
Have you ever experienced a weird feeling of anxiety or stress when entering into any trade? Well, You have been a victim of FOMO. I can unquestionably say that every trader encounter FOMO in trading. But actually, what is FOMO; what are its physical and emotional implications? And how can you free yourself from it and, parallelly, improve your trading performance?
To answer this question, we must first look at what emotions are.
In truth, our emotions are tricky in nature, and scientists have a hard time reaching them. But most experts in the matter agree on three things:
The middle layer of the brain, called the “Midbrain”, is where emotions originate.
A complex series of physical changes throughout the body is at the core of any emotions.
These physical changes condition/prepare us to take action.
Emotions tend to have us act in different ways. For example, when you’re under the influence of FOMO, you commonly tend to override your trading plan, making changes to your trades, increasing your risk, entering before you get a signal, not getting out when your price target is reached. And so on. But all this drama is happening is simply because we are emotionally charged to do something. In other words, you can call it a tendency to act. There is a big difference between "need to act" & "tendency to act".
Let’s say you’re anxious about missing out particular trade outcome; you will certainly tend to do things that you wouldn’t normally do. But no matter how hard-hitting the emotions are, you can choose to act differently by your plan and your longer-term objectives.
The experience of FOMO certainly varies from person to person, but it may include some of the following:
Physical changes – blood pressure, heart rate, perspiration, breathing, etc.…
Sensations – racing heart, stomach-churning, shaking legs, sweaty hands…
Thoughts about what might go right, what might be missed, memories of when you missed an opportunity, etc.…
Uncontrollable urge to act in a particular way.
But no matter how influential these symptoms are for you, they absolutely do not control your response. And here’s a simple example to explain why.
Have you ever felt angry but acted gently?
I’m sure you have. Even though you felt like exploding, you actually managed to speak slowly and calmly while maintaining a look of patience on your face.
What stopped you from acting out your anger?
Try to recall... 😊
Well, The answer is "Your willpower". Isn’t it?
It’s just that! You can find many other reasons, but essentially, all it takes is your will to respond to the situation consciously. In other words, you tended to act like an angry person, but you chose not to.
Here’s the point I’m trying to convey, Even though you can’t really control your emotions and how you feel, you can directly control your response.
This realization has an important practical application for you as a trader because once it is understood, you’ll understand that it’s far more useful to focus on what you can control than what you can’t.
The idea that emotions control your actions is universally accepted as a fact, and it’s an irresistible illusion. But it’s just that an illusion. And it’s so tied in our minds that it’s hard to believe otherwise.
Let’s get back to FOMO. When you’re in that state, remember that even the most skilled traders encounter this. Probably not as often as beginners do! But, the main difference is that, consciously or unconsciously, they’ve somehow managed to develop a stronger will than their urges. They’re also the result of understanding very clearly that emotions in a field like trading, are unreliable and following them will often lead to disastrous results. In other words, a pro-trader is someone who has learned to do what needs to be done instead of doing what’s easy. He/ she is someone who doesn’t seek to do what’s easy at the moment to the loss of his/her longer-term goals.
It’s like doing regular exercise. It’s not easy but you still do it. Because you want that damn results!
It seems as if emotions cause us to lose in the markets. But actually, it’s not true. We’re only acting this way because we’ve developed bad habits.
But if you can consciously bring your attention to how you’re feeling in the midst of FOMO, and if you can consciously observe how this is giving you the tendency to behave in a certain way, then no matter how strong the emotions are, you’ll still be able to control your actions.
And this is how you learn to manage FOMO 😎
Well, I hope this blog helped you. If you like the content, hit the like button and share it with your trading friends.
If you have any questions, kindly post them in the comment :)
Happy Trading 😎
Wishing you most and more,
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