Think of being at a party, eating some finger foods and all of a sudden you hear a group bursting into laughter nearby. The feeling comes on immediately. Why do they keep talking about things that you haven’t heard? Put more money (and zeros) on the line, change the snacks to candlesticks and FOMO becomes relevant for traders of Forex. (FOMO in Forex Trading)
Ok, but what is FOMO actually? What is it about these issues that makes Forex trading so tough for people? Rest for a bit while we examine what causes this kind of psychological pitfall. Learn about what it does, why it’s hard to notice and how to avoid its effects on your orders.
What Is the Concept of FOMO?
FOMO or Fear of Missing Out, is that feeling deep inside that says, “Friends and other people are discovering something good and you might soon miss it. Act now!” It’s a bit like a persuasive salesperson that simply refuses to let go.
Traders in Forex often get this feeling when they notice (or believe others are noticing) that some individuals are making winning trades at the right time. There’s a rising currency pair on the chart and you start to think really fast. Should my business get involved? Notice how many things I miss! Doesn’t it just seem unbearably difficult?
This gets a bit more complicated here. The Forex market changes rapidly unlike observing a missed bus or spilled milk. Part of FOMO is steering you toward extra opportunities which may not be a wise decision.
How We See Things Makes a Big Difference
Why do traders feel that FOMO is holding them back so much? Differences in how we look at things are the main reason. Comparing, judging and acting in the same way as others (with sometimes tragic results) is an inherent human trait. A bullish candle like that could be saying to everyone watching, “All traders are making profits right now!” Are all employees actually earning a great deal of money? It’s not very likely to happen, spoiler ahead.
Many people worry about this partly because they love and hate not knowing what will happen. Forex is not predictable. In numerous cases, a rising trend flips into a sharp decline very suddenly. FOMO is excited by the fact that things are out of control. It argues, “Waiting to start will only cause you to regret not doing it early.” Nobody wants to feel regret. No one.
Yet this is important: what trading feels urgent about is often just because of psychological influences. This is correct: behind all your moods, your brain is actually doing the deed.
Forex – The Highs and Lows of Emotions
FOMO makes it hard to think logically about what we do. Think of yourself behind the wheel and adrenaline is in control while anxiety is sitting next to you. Do you think you can guess what final destination the car will reach? It’s a ditch all right.
A lot of time, Forex FOMO leads traders to make quick decisions to start buying or selling. They decide not to use their strategies or selling points, thinking they can keep making profit as the trend goes on. Some parts are laughable, as trying to cross the road by jumping into a car always on the go seems very risky.
In most cases, these speedy choices don’t achieve good results. FOMO can stop you from seeing risks which leads to more losses. A bad run brings those losses stacking up. It brings a whole serving of regret and some serious frustration too.
One common question is: shouldn’t some amount of excitement benefit a trader? Sure! Positive enthusiasm promotes concentration and motivates people. Really, when things get good, things can also get bad. It is at that point that the trade-off becomes important.
Some FOMO Triggers in the Forex Market That You Might Not See Coming
Ah, triggers! They lead to you feeling left out in Forex Trading. Some crises go under the radar, but others are very clear and impactful. Noticing these triggers is the starting point to escape them.
- Social Media-Driven Bragging
- Have you ever noticed other traders posting their big wins? It affects us much more than ads for luxury watches do. Those pictures often cause us to think the same way over and over again. If that’s possible for them, why shouldn’t it be possible for me?
- But there is a big point to make here. Almost all of them avoid mentioning the losses, late nights and constant stress that happen beforehand. What is something everyone shares and what is real? These things are very far from each other in meaning.
- Market Noise
- Have you ever taken some time by a creek, listening to its water move? Investment terms, you should multiply that up by ten. Flashing charts, a torrent of analysis and all the headlines say “BREAKING NEWS!” There’s a strong sense of perhaps never being quite ready for a life-changing event. Who knew this? A majority of it is really just noise. Removing its influence needs a certain amount of discipline.
- Sudden Changes Done on Large Scales
- Seeing the USD/EUR go up by a lot in just a short period can spark FOMO. Seeing the market rise gives a sense that someone is choosing the pot of gold and running off with it. Things get less rational as your mind creates multiple what-if situations.
- Past Regrets
- Have you ever let go of a promising trading chance and in the end regretted not buying? FOMO tends to make people think of all the things they missed. It puts them in front of you regularly, giving you another reason to act right away.
Find Out How to Outsmart Fear of Missing Out (Before It Scares You Away)
The good part about the above? You don’t have to constantly lose in that competition with FOMO. These are some strategies to stop those nagging ideas:
- Keep Your Attention on Your Strategy.
- Picturing your trading plan as a GPS can be very useful. A formal guide prevents you from getting distracted and helps you stay on track. If the plan disagrees with risky trades, that is a sign to avoid them. Just because the market is highly active, try not to worry too much about your decisions.
- Step Back Away From the Overhype.
- Yes, unplug. Try to spend less time with alerts that make things look urgent. Not hearing the crowd can help you stay mentally healthy.
- Understand That You May Not Do Each Move Professionals Are Performing.
- That’s the reason the market rocket you missed is so important. Other prospects will appear as time goes by. There is always trading happening in the Forex market. Concentrate on how you play going forward rather than getting hung up about the past.
- Work on Becoming Emotionally Neutral.
- It can seem that the market goes up and down in trading. Sometimes athletics makes you feel amazing and then it can knock you down. It helps to control your feelings. Have you ever been told the advice “Keep calm and continue with your duties”? Use it to describe what is happening here.
Learnings from the Era Called “FOMO Battlefield”
Watching the market is stressful and every trader can tell FOMO war stories. Experiencing missed profits, struggling to rest and hesitations in one’s own confidence. I bet you know what I am talking about. That’s okay. Performing in trade stocks perfectly is not expected, but staying in the game and learning is.
Instead of treating FOMO as something bad, learn what it can show you. It underlines what you don’t do well which allows you to improve your skills. Eventually, you will notice those traps sooner and escape them just as somebody who knows their psychology.
Then How It All Works
The way people feel when they have FOMO in Forex trading is both complicated and fascinating. It feeds on the things that scare you, expands your anxieties and often succeeds under stressful situations. On the positive side, however, awareness, patience and discipline allow you to deal with FOMO and avoid it from controlling your actions.
When you see a stock that seems very attractive, stop and think first. Breathe. Put your focus on carrying out your strategy. In the long run which is better? Embracing uncertainty or building a career as a clear-minded, focused and persistent trader?
