Meet FOMO……..a traders nasty little secret.
Hindsight always makes trading seem so clear and easy, the reality is trading real time is far from easy. Everyday there are setups we miss, momentum stocks making crazy 50-100%+ moves…while we are sitting there watching as some stocks go higher and higher without us, the stocks we are sitting in are doing nothing can easily bring on a strong case of FOMO, Fear of Missing Out.
Telltale signs of FOMO include:
-Breakage of a keyboard, or other related computer part
-Complete inability to think clearly
-Abandonment of any and all trade plan and rules
Giving into FOMO almost always leads to a repeat of many of the above listed symptoms, along with a large red loss for your trading account. FOMO is a nasty habit I have mostly left in the rear view mirror…..I say mostly because there is still the occasional relapse…..it often occurs after a dry spell……it also sometime occurs when I have had a hot streak , maybe the markets have rewarded me some when I did not deserve it and I have gotten sloppy in following a plan.
Here are a few tips that have helped me tackling FOMO:
- Sometimes You’re Hot, Sometimes You’re Not.
I know that my personal style of trading won’t work well in every market, if I can’t adapt then I need to spend more time sitting on my hands and being much more selective in what I take. Being at peace with missing moves, and knowing that there will always be more setups coming.
2. Focus on the Next Trade
Remember, there will ALWAYS be more setups. Instead of focusing all your energy into what you missed out on, focus it on what’s next. Ask yourself “what is the next trade?” Look forward, not back, hard to see what may be coming if you are always looking in the rear view mirror.
3. Take a Break
Step away from the screen for a little bit. Go for a walk, take time off, get some fresh air, and clear your mind. That way when you come back to the screen you are ready to move onto the next setup with a clear mind and with your emotions unattached.
Good pointers. I often hear to switch to paper trading in tough markets to satisfy FOMO. Paper trading does me no good at all.