FOMO (Fear of Missing Out) is a term that describes the psychological anxiety of missing out on opportunities. In particular, new investors often experience this feeling when they are afraid of missing out on opportunities or profits when following the general trend. FOMO can affect their decisions to buy and sell cryptocurrencies. So what is FOMO in crypto? Let’s find out about Crypto Trading through the following article!
Concept of What is FOMO in crypto?
First, let’s understand What is FOMO in crypto. FOMO is the anxiety of missing out on an opportunity or something important. It is not only related to material things but also to other aspects such as experiences and social interactions. FOMO often appears in many fields such as cryptocurrencies and also in marketing. In the cryptocurrency market, FOMO can lead to hasty decisions to buy and sell coins. This is often imposed by emotions such as anxiety and greed. Instead, they are based on strategy and careful research.
The Psychology of FOMO Syndrome in Crypto Technical Analysis
A person affected by FOMO often has the following symptoms:
- Constantly worry and check the token price, and track trading positions and invested amounts.
- Always feel compelled to follow news and trends on social media and media to look for profit opportunities that they perceive as potential.
- Making hasty buying and selling decisions based solely on the “hotness” of a token or large price fluctuations. However, without any strategy or research on the risks involved.
What are the characteristics of FOMO in Crypto Trading?
FOMO often leads to the following psychological symptoms:
- Greedy Psychology: The urge to trade immediately to make quick profits. Or can lose composure when imagining the huge profits that can be achieved.
- Crowd mentality: Only looking for information and reactions from the crowd. Instead of making decisions based on personal knowledge and research.
- Impatience: Judging opportunities as unique and not to be missed. This leads to rash actions without thinking.
- Illusion and expectation psychology: Illusion of quick success, lack of real knowledge and skills. Leads to investment decisions based on unrealistic expectations.
See more: Capture fluctuation volatility trading professionally
Some causes of FOMO syndrome when earning money in Crypto
So what causes What is FOMO in crypto? FOMO can arise from many causes, including both subjective and objective factors. Investors need to pay attention to the following causes to prevent the formation of FOMO:
Subjective causes of What is FOMO in crypto?
With the growth of the market (uptrend), the positive psychology of investors is often stimulated. However, in this situation, FOMO can become common. They often enter the market without the necessary knowledge preparation. When the market goes through correction or volatility, new investors often have difficulty recovering their capital and managing their positions.
The spread of unreliable market information is also a concern. Participating in newsgroups, market signals, or informal forums can put investors in a state of uncertainty. This is an environment that easily facilitates the development of FOMO. They are easily influenced by unreliable information or crowd influence. This can lead to falling into incorrect trading or investment plans. They will even face risks such as fraud and loss of assets.
Objective causes of What is FOMO in crypto?
Investors choose a short-term trading style, also known as swing trading or scalping. They often seek quick profits and require an understanding of technical analysis. However, many new investors are often impatient, engaging in short-term trading with large capital. Then they fall into FOMO. As a result, they may win less and lose more.
Lack of a trading strategy or method is a common mistake. Successful investors often have a complete trading method system after a long time of research and practice. Meanwhile, new investors often approach the market without a method. As a result, they are easily affected by FOMO without guidance or rules.
Lack of experience makes new investors lack risk awareness. As a result, when faced with FOMO, they may be willing to put all their capital into a single trade or invest without thinking.
Who Created FOMO in Crypto Trading?
The entities that generate FOMO can be projects, organizations, or influential individuals (KOLs) in the crypto market, with their subjective intentions.
FOMO is often used as a tool to push the price of a token up. This creates liquidity for the creator of the FOMO to profit from. Typically, they will own or influence multiple media channels. This will influence the actions of as many people as possible.
What are the consequences of FOMO in Crypto Trading?
Investors who know What is DCA in crypto, are more susceptible to FOMO. Because this is one of the investment methods that does not care about price. From there, mentally, FOMO creates a feeling of instability, anxiety, and fear for investors and traders. In worse cases, if this situation persists, it can cause depression for people affected by FOMO.
In decision-making, FOMO often leads to irrational and hasty decisions in trading. This can cause FOMO sufferers to get stuck in a “buy the peak” state, buying tokens at the highest price. Constantly living in a state of FOMO can reduce the value of the asset over time.
See more: MEXC: Open a MEXC account, invest effectively
How to overcome psychology What is fomo in crypto?
In reality, it seems that FOMO cannot be eliminated. And no one can completely avoid this psychology when investing. However, there are some measures to help minimize the situation of FOMO as follows:
- Do thorough research and make decisions based on technical and fundamental analysis. Avoid acting rashly when “shilled” or focusing on price movements at any one time.
- Investors should always plan before trading Crypto. This includes setting a stop loss, entry point, take profit point, and capital allocation before making a trade.
- Always be patient and stick to your plan when trading Crypto. If necessary, consider adjusting your plan based on various factors such as market trends and price fluctuations.
- Avoid trading based on news or events. Instead, focus on observing the market and reacting carefully.
In addition, understanding What is volatility will also help investors make the right decisions. Volatility often refers to the level of price fluctuations of cryptocurrencies over a certain period. It is often measured by the variance or standard deviation of prices in the Crypto Trading market.
Conclude
The above article has shared information about What is FOMO in crypto. Listening to other people’s opinions can help you better understand the situation, but you should not completely depend on them to make a decision. Although an option may be suitable for many different people, it is not necessarily suitable for you. So make the right decision when investing in the Crypto market. Continue to follow Crypto Trading to get more useful information!
FAQs
Who will create and influence FOMO?
FOMO is an important support tool for organizations and influential individuals in the cryptocurrency market. They use FOMO to gain personal benefits. This affects the trading decisions of retail traders.
Why Can FOMO Influence Investment Decisions?
FOMO can make participants feel pressured to buy while prices are rising. This leads to ill-considered decisions and can result in losses.
How to Control FOMO When Investing in Crypto Trading?
To control FOMO, investors need to conduct thorough research, set up a specific investment plan, and not let emotions dominate trading decisions.
