Are you missing out of opportunities?

FOMO ( Fear of Missing Out ), also known as “fear of missing out”, is an acronym that seems to explain the psychology of many people when investing in digital currencies. As the name implies, the fear or irritation that people feel when they miss something that others might enjoy. In investment, it refers to the return on investment or the opportunity to earn more income.

FOMO is the most common among newcomers, leading them to make large-scale investments after the market value has risen sharply. This behavior is generally irrational, because professional traders often buy when the decline ends.

Like other markets, FOMO is also one of the factors that affect trading results and has a huge impact. Let us see how we should avoid being affected by it.

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How is FOMO related to the digital currency market?

In the digital currency trading market, the widespread existence of FOMO is due to the sharp appreciation of Bitcoin, Ethereum and other digital currencies. As more and more people realize that these are great opportunities, more and more people are afraid to miss them.

When people think that a particular digital currency has the potential to give them a huge victory, they buy in large quantities. Since many professional investors and traders believe that blockchain and digital currencies are in their infancy and have huge development potential, FOMO is not only an investment psychology, but also a driving force for the market.

On the other hand, FOMO also helps to create value because it encourages traders and investors to try various digital currencies. It is driving multiple investments. For example, DeFi and NFT, because funds are used for productive purposes, the value of the digital currency market will continue to grow.

However, with so many traders pouring into the digital currency market, the biggest risk FOMO brings is that once the psychological impact has passed, it may cause prices to fall.

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If you are a FOMO trader

If you often have the following feelings, then you may be a FOMO trader:

  • When others buy digital currency, you will be affected
  • Make unreasonable decisions without proper analysis
  • I have been racking my brains to find opportunities to buy digital currencies that have grown substantially recently

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How to avoid FOMO?

There are some ways to keep a clear head and avoid making wrong trading judgments under the influence of FOMO.

Stick to the basic principles
The first thing you can do is to stick to the basic principles and analyze the charts. This means rationally analyzing the value behind the asset by analyzing the strengths and potential shortcomings of the asset. So, research it beforehand, and once you make a decision, stick to it.
Consider the previous FUD
Next, FUD must be noticed as early as possible and reacted. FUD is an acronym for fear, uncertainty, and doubt. It refers to feelings spread by bad news on social media and other channels. It is not based on basic principles or diagrams. However, if you think this will affect the price of a certain digital currency, please stop. And prepare for the price drop in advance.
Examine the mistakes and losses of yourself or others
FOMO is directly related to your decision-making. Remember the last time you failed because of the influence of FOMO? Use it as a wake-up call, refer to cases where others have suffered huge losses, join the trading community, ask others for their opinions, and encourage them to share their failures. When you are ready to start trading, try to analyze the root cause of failure and avoid repeated failures.
Use drawing software
Finally, using charting software, real-time news and premium analysis, trading platforms provide this analysis, such as Binance. Its intuitive user interface, technical indicators and customized trading strategies all help traders understand the digital currency market and prevent them from falling into the trap of FOMO.

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