In today’s episode, we will be speaking on one of the most common fears in trading; the fear of missing out! 

FOMO is one of the biggest account killers that we’ve seen as educators in this industry, so we believe it is important for you to understand what it is and how to manage it before you you fall victim to it. 

Have you ever jumped into trades early without confirmation because the market was moving and you didn’t want to miss out on potential profits? How about scaling up your size to catch up to other people’s results in trading groups that you are part of? 

If this sounds familiar, then you have already experienced the fear of missing out to some extent in your trading. It’s only natural as humans for us to want to be part of the action especially when volatility starts to pick up! 

If you stick around for the full show, you will learn what FOMO is and how it manifests so that you can be better prepared to manage or even avoid it! 

So what exactly is the fear of missing out? 

Well by definition, it is the “fear of not being included in something (such as an interesting or enjoyable activity) that others are experiencing”. 

In other words, the fear of missing out is a social anxiety that extends beyond the realms of trading; it is present in everyday life!

It is characterized by a desire to stay continually connected with what others are doing – translated to trading – it is the equivalent of wanting to continually be in a trade so that you don’t miss out on any market action.

Falling victim to FOMO can be devastating to your trading account and your psychology – traders that suffer from FOMO trading will typically experience the following cycle repeat time and time again:

  1. Buying into market tops when experiencing excitement to get into a position and letting greed turn winners into losers.
  2. Selling out of losing positions into market bottoms when experiencing peak fear and anxiety about losses.

This cycle repeats every time the trader loses patience with their trading plan and can be incredibly frustrating – to the point that many go bust and exit the industry at this stage.

The fear of missing out drives the behaviors that you're buying tops and selling lows- you are getting sucked in emotionally into a business designed to be methodical and process-driven Click To Tweet

Now that you know what FOMO is and the typical cycle that a FOMO trader experiences, let’s take a moment to discuss some common things that a FOMO trader says.

This is important because if you can catch yourself saying or thinking these things in real-time, then you will be able to adjust your emotions on the fly and avoid FOMO altogether!

  1. “Everyone else is making money, it can’t be that bad”
  2. “Just think about how much money I could have made on that trade”
  3. “Meh..I’ll just give it a go”
  4. “I knew that was going to happen”
  5. “They must know something else that I don’t”
  6. “I can’t miss out on the next great opportunity”
  7. “XYZ stock looks like a pretty safe bet, everyone’s trading it, why wouldn’t I? “

What you should realize by this point is that FOMO is an internal feeling and the words you speak can and will affect your psychology – with that said, there are some external factors that can also trigger the FOMO process!

These include:

  • Increase in market volatility
  • Coming off of a long winning streak
  • Taking repetitive losses
  • Social media, especially Instagram and Twitter
  • News and rumors

While it’s great to understand what FOMO is and how it can be triggered, the last piece of the puzzle is how to manage or avoid it altogether!

We’ve put together the following tips and tricks to help you eliminate FOMO from your trading experience:

  1. Have a trading plan – know EXACTLY what you’re doing and your role – find low-risk high probability setups and only trade those 
  2. Accept that trading has its ups and downs – understand that you can’t win every trade 
  3. Be present – focus on the next best trade ALWAYS
    • The first stock exchange in the U.S. was formed in Philadelphia in 1790
      • In the last 230 years…how many trades have you missed?
    • You’ve missed more trades then you’ll ever take!
  4. Focus on the process and setup, not the end result (the score)
  5. Keep a daily gratitude journal
  6. Keep a trading journal with your emotions and thoughts pre/during/post-trade
  7. Don’t compare your results to others (learn from their approach, not their fills)

Some Things We Also Discuss in Today’s Show: 

  • The fear of missing out in everyday life 04:31
  • How the fear of missing out shows up in trading  06:40
  • The typical cycles that a FOMO trader experiences 09:15
  • Is there really such a thing as a FOMO trader? 12:52
  • The seven things that a FOMO trader often says 16:50
  • The external factors that trigger the FOMO process 36:30
  • Several solutions you can implement to manage FOMO 46:50
  • Why tracking your emotions pre/during/post-trade can help you identify patterns 55:30
  • Why you should not compare your results to anybody else’s 60:02


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