Fear of missing out
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    Fear of missing out

    Hi, everybody.

    Today I want to tell about interesting psychological issue that traders face with that is called "Fear Of Missing Out" (FOMO)

    FOMO actually appears when one fears that everyone else is having more excitement and more rewarding experiences than you. Rapid growth of social networks had brought FOMO-effect in some people's life.

    People tend to check their email every 2 minutes, renew their page in facebook or twitter. Of course, those suffering from FOMO have smarphones to "keep in touch" with the news. Their ability to concentrate on their work decreases, their relationship also tend to decay.

    But destructive effect of FOMO in everyday life (when one can't stop checking his email) is slow, but when we are talking about "trading FOMO", it can easily lead to heavy overtrading and huge drawdown as a result.

    You can identify features of FOMO in your trading life with a simple check-list:



    1. Do I tend to place market orders most of the time instead of using limit orders?

    To rephrase: do you provide liquidity or consume it? It often distinguishes good trading habit from bad one. "Jumping in quickly" works in very limited set of setups and you should have very solid understanding of those setups. Example is momentum trading, this style requires to go with the price in some situations (instead of buying pullbacks). But as I have said, market conditions must be in your favor, good momentum trade can require 2-3 days of preparation.


    2. Am I searching for a "Home run"?

    By "Home run" I mean rapid and big market movement, that easiliy moves your equity curve forward.

    Traders, suffering from FOMO easiliy project market movements in future and tend to predict rather than to manage their positions. If you look at equity curve of consistently winning traders, you may notice that equity rapidly goes up in 25-30% of all accepted trades. Other trades tend to do small profit, to generate small loss or breakeven.
    It means that nobody really knows when a "home run" will appear.

    Great amount of work shoud be done in a process of filtering bad entries and preserving your capital.
    "First survive than prosper" - said Mario Puso's character Don Corleone. It's absolutely right when we are talking about trading.

    Best traders know that they can only project small price movements (usually next 3-4 bars), that allow to reduce their risk and let some profit run. Yet there are some trading styles like scalping when you don't need "home runs" to generate income.


    3. Do I lack patience?

    If you lack patience and know that, probably you should think about eliminating FOMO from you trading.

    Cure for that is first increased self-awareness, second - you should probably lower stress and pressure from your trading.
    Maybe you are risking too much or you lack some basic needs (want more money quickly).
    Seriously consider lowering that pressure. Any action that helps is good here.


    Do you have FOMO and how you try to eliminate it?

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    Last edited by Value trader; 08-07-2013 at 09:23 PM.

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    I think we have to control this, fear of loosing is very harmful for the trader. try to overcome this fear. enter the market with full confidence and after observing a pair deeply, see it's upcoming fundamental news do a good technical analysis then you may open a trade with much more confidence and can get rid of the fair of loosing.

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    Quote Originally Posted by yasircheema View Post
    I think we have to control this, fear of loosing is very harmful for the trader. try to overcome this fear. enter the market with full confidence and after observing a pair deeply, see it's upcoming fundamental news do a good technical analysis then you may open a trade with much more confidence and can get rid of the fair of loosing.
    It's not about the fear of losing, it's fear of missing out.
    Trading with fear of losing I would call "defensive trading". FOMO is more likely "fear of not winning". Both things are destructive for trading account

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    Registered user taqiniazi's Avatar
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    Fear in forex means you can try to make loss. fear is very dangerous that can directly affect your skills of decisions making and technical analysis. so be aware please.

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    Registered user dkarev's Avatar
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    well to me,i dont think one should be afraid of missing out when trading,it very important we stay attractive when trading and that is the only way we can make good money from trading.so it very important we are always updated about the market and never leave any stone unturn when analyzing the market.

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    Quote Originally Posted by dkarev View Post
    well to me,i dont think one should be afraid of missing out when trading,it very important we stay attractive when trading and that is the only way we can make good money from trading.so it very important we are always updated about the market and never leave any stone unturn when analyzing the market.
    One should not be afraid but he is afraid :)

    Logics doesn't work when emotions come into play

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    Last edited by Value trader; 08-20-2013 at 08:36 PM.

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    phobia in the face of any situation in forex floating either minus or plus it's not a good solution sir, good is immediately limit your losses and let profits run length

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    should have been thinking like that is afraid of losing when we trade should be removed, because with that kind of thinking we could have one of the later decisions when trading.

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    I think we've got to manage this kind of, fear of loosing is extremely dangerous to the investor. make an effort to get over this kind of dread. type in this market with full confidence in addition to immediately after watching a pair significantly, discover it truly is upcoming standard news start a very good techie analysis you may then available the trade having considerably more self-assurance and can eliminate the sensible regarding loosing.

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    Quote Originally Posted by free-one View Post
    I think we've got to manage this kind of, fear of loosing is extremely dangerous to the investor. make an effort to get over this kind of dread. type in this market with full confidence in addition to immediately after watching a pair significantly, discover it truly is upcoming standard news start a very good techie analysis you may then available the trade having considerably more self-assurance and can eliminate the sensible regarding loosing.
    I think fear comes because we don't want to lose our earned money or our capital. Then we will miss our confidence when trade, Its very bad because its fears we don't know what to do and dont have confidence anymore. Maybe after one or two lost trades we will be traumatize about that loss and make us be nervous , afraid of loss again and also always not sure with take decision. Its make us miss good opportunity to earn some profit

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