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Dealing With The Fear Of Missing Out

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Market extremes are usually accompanied by emotional extremes for traders, and even long-term investors might be dragged into the sentiment roller coaster to commit mistakes that they will regret afterwards. One of the most common emotions is the infamous Fear of Missing Out (or FOMO) that is the strongest near market tops. Watching the price of the desired asset going higher and higher when you are not in— it sometimes feels worse than enduring a loss.

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Price cycles are governed by several things, from fundamentals, the economy, central banks, and crowd psychology, but when it comes to your own emotional cycle, it’s only you, your positions and the market. That said, a market cycle usually triggers the same kind of emotions in the majority of traders, which in turn has a profound effect on the market itself.

The above “calendar” for investors contains the different common emotions in the average trading cycle. Short-term traders know that this cycle can be a really fast one, especially if the trader is using leverage, or simply having a too large position.

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The Place of the FOMO in the Cycle

The FOMO phenomenon comes at the times of excitement, thrill, and euphoria and it, unfortunately, increases exponentially as prices rise. This is how speculative bubbles and manias are created, as the rising prices and the emotional pressure create a vicious circle. New investors pile in, as they see that virtually everyone is making a ton of money apart from them. When the rising prices draw the attention of the public (the so-called cover page effect) that’s where an investor should start to worry about a boom-bust event.

The media and the current “always-online” mentality just exaggerated the sentiment cycle and emotional extremes form more quickly and easily. The volatile cycles of the crypto-coin market are perfect examples for that, although a stock market or a commodity cycle involves way more people, as the investor base is much wider.

A Personal Story

Silver during the 2009-2011 bull market

As a trader, especially in my early years, there were several opportunities that I missed and couldn’t let go of. Silver’s parabolic rise in 2011 is one of the moves that I will never forget. I was investing in silver before for a long time, since central banks started using their “extreme monetary measures”. I opened a large core position at the indicated point on the chart and had a very rough ride up until I finally sold in early 2011 when a trendline was broken, and I thought that the bull market was over.

As I also had trading positions in gold as well, I was naturally looking at charts every day, and I got dumbfounded when precious metals turned around again and skyrocketed to new highs a few months later, with silver almost doubling once more—me on the sidelines, mind you. It wasn’t just emotionally taxing but it also affected my trading; I was so biased that I barely opened long positions and missed several great trading opportunities because of that.

Also read: My Year as a Perma-Bear or How to Deal With Trading Biases

The most important takeaway is that it in hindsight, it was a great investment, I followed my trading plan, and still, I feel regret anytime I think about that period. That said, it helped me in learning that you will not only have “perfect” trades in your life, and that I should focus on my trading plan rather than chasing tops and bottoms.

How to Control Your Emotions?

It’s inevitable that you will get involved with emotions during trading, especially as a beginner. And it’s not always a bad thing either, if you can channel your passion towards research and education, rather than watching prices every ten minutes. So what exactly can you do to prevent emotional troubles?

  • Accept that you won’t buy at the exact bottom and sell at the exact top
  • Don’t look at the charts whenever you can, try to structure the time you spend with trading
  • Use a trading plan that tells you what to do with profits and losses alike
  • Follow your own trading plan, don’t compare your performance with others too often
  • Control the size of your positions and avoid overexposure
  • If you trade, don’t count the profits that you missed because you were early or late, focus on new opportunities
  • As an investor, try to place your investments in times of panic and despair, that’s how major bottoms are formed

Using technical analysis and momentum indicators helps in identifying market extremes, oversold and overbought markets, although those tools will never be 100% precise, and will only help in roughly timing your trades. And “roughly” in a volatile market can mean that you will miss a large chunk of the move, but as Linda Rashcke, one of the greatest traders, once said,

If you consistently profit from 60% of the major moves, you are a super trader.

What is your experience with FOMO? If you have a similar story than mine, please share it with us in the comments.

Featured image from Shutterstock

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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11 Comments

11 Comments

  1. Jeremi Fisher

    June 14, 2017 at 7:37 am

    Very good article Cser. Many will benefit from this post.

  2. dissonance_engine

    June 14, 2017 at 8:00 am

    This article is gold, probably the single most important lesson I’ve learned in my trading history and I agree many new trader will benefit from this advice. Getting a good entry in times of panic and extreme selling is the secret to maximum profit, instead of chasing the gains.

  3. sstteevvee33

    June 14, 2017 at 8:22 am

    Excellent article – i have only been trading cryptocurrency for a couple of months and have had many experiences of FOMO! This advice is invaluable!

  4. ltummers

    June 14, 2017 at 9:41 am

    Great article, great rules to hold on. But sometimes very hard 🙂

  5. Bhodi Govind

    June 14, 2017 at 10:23 am

    Thank you Mate for this awesome article, I am very new to this thing and market and see it more as a fun opportunity but indeed it’s great to read this article as I already experienced some of those emotions 🙂 hehe..

  6. thoth

    June 14, 2017 at 11:59 am

    Not buying into the ETH ICO And rise after rise still never trading ETH because I could have had it at $2.

  7. PAPAFIT

    June 14, 2017 at 1:16 pm

    This are golden rules “advices” for everyone who participate in tradings.
    I also learned a lot from this mistakes, but with time I become a better and smarter trader. 🙂

    Thnx for the tips Mate

  8. wizdumb

    June 14, 2017 at 1:26 pm

    I am very new to this. I experienced this very thing during the week-end. Sold ETH around 300$… 😉

  9. alecuk

    June 14, 2017 at 1:54 pm

    I am up almost 100% in cryptoland. To some that will be peanuts and to new people entering the market (as I did 3 months ago) it will be very far away! This article came at a very good time to help me manage my emotions and with solid advice I can put into place.

    Thanks Mate!

  10. donnyw

    June 14, 2017 at 6:35 pm

    I’m a beginner and I can relate your story to mine, very good article for me.

  11. bitsurfer

    June 14, 2017 at 7:22 pm

    Not getting in on ZCash! FOMO is real 🙂

    Great advice.. be patient, generally, a good buying opportunity is blatant. When you think..man this is skyrocketing, and ask will it go further? Might be a good time to sell.

    But we’ll never truly know! 🙂

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My first experience with Robot Trading: Up $5 000 in Two Weeks

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Since I’m pressed on time with multiple obligations (job, familiy, hacked.com, CCN, MoneyMakers) I decided for a couple of weeks ago to look into robot trading. I wanted to find one or multiple robots to do the trading for me. I ended up with downloading MetaTrader 5 and buying two different robots from their marketplace. I started with 16 000 USD on the trading account, and after two weeks the robots have made me $5 000.

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That’s a whopping 31% increase within 2 weeks…!

My robots usually trade during the night, and I’ve decided to completely trust them. The 16 000 USD is a sum I’m more than happy to lose if I can learn anything from dealing with trading robots.

When that is said, MetaTrader’s interface really “SUCKS”. It’s so bad, I can’t understand why MetaTrader is considered the best trading terminal for robots. Maybe that’s a good business idea for someone out there? Disrupt MetaTrader.

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So, which robots do I use?

I do not want to disclose that just yet, I need to test my robots rigorously before I can recommend any of them. And if this is a money making machine, we can laugh all the way to the bank.

Have a good weekend.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Due to High Demand: MoneyMakers Now Available as a Monthly Membership

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Since we opened for registration yesterday, we received many requests to offer a smaller membership for a monthly fee instead of the yearly $5.999 offer. I am all for listening to our members at Hacked.com and I have decided to open a new membership level on MoneyMakers.com for $249 per month. It is a lite-version of the premium yearly offer, and if you want more support – you are free to upgrade to a premium membership.

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Limited Discount Code

For the monthly membership of $249, I’m giving the first 50 clients a $50 monthly discount by using the coupon code: C173C8F840

Our offer

Get guidance from our team and receive a mentor to help you in reaching your financial goals. If you follow our rules, you will reach your financial goals within ten years. If you don’t, we will refund 50% of what you have ever paid us. If we see that we can’t increase your returns more than this membership cost, we will cancel your membership and issue a one month refund.

[easy-pricing-table id=”27339″]

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And yes, you can pay with bitcoin, just email me: jonas.borchgrevink(at)moneymakers.com

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Limited Offer: MoneyMakers is Now Open for 10 Members Only

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I’ve decided to start with 10 members only for MoneyMakers.com. I’ve priced MoneyMakers.com after what my team and I will provide for you during the course of a year(s). I initially thought we could do a monthly fee, but this seems to be counterproductive as our service will be focusing on longterm growth, not short term.

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Also read: Pre-register for private consultation

This service is a 1-1 service, you will get full backing by me and my team if you join.

While the price is high, your outcome is expected to be higher. You can read more about what we will offer and which guarantees we will give you here: https://www.moneymakers.com/checkout/?level=1

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I will only start with 10 members initially. Due to the interest I’ve received, the available memberships will fill up quite fast.

MoneyMakers will eventually evolve into a full network of highly motivated individuals.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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