FOMO is an abbreviation of Fear of Missing Out, a term of English origin. Its Turkish equivalent is called fear of missing the opportunity. The term FOMO, which is often used in the crypto money sector, is used in the sense of regret. In short, FOMO is the fear of missing out on the big opportunity in the markets. It is a fear that everyone who buys and sells will experience. It can impress everyone from the professional to the amateur investor. In fact, this feeling is triggered by the feeling that others are more successful, and overly high expectations, lack of long-term perspective, overconfidence, or too little confidence can lead to an unwillingness to expect. Emotions are often the main driving force behind FOMO. It has taken its place in the literature from a psychological point of view. If left unchecked, they can cause traders to neglect their trading plans and exceed their comfortable level of risk. Common emotions that can feed FOMO in trading include:
- Greed and fear
- Excitement
- Envy
- Impatience
- Worry
What is the FOMO effect?
The term fomo is actually of an individual nature. Instead of the psychology of an audience that markets generally influence, there are some attitudes that individuals take about their personal investments. FOMO also arises due to the display of emotional behaviors instead of rational thinking. As one of the simplest examples of this, FOMO can lead people to think that “those who own bitcoin ride in the latest model sports cars” and push them to some irrational investments. The main thing to do to avoid getting caught in FOMO is to act logically instead of acting on emotions. In order to avoid losses, investments should be made not according to tempting feelings, but on the basis of concrete information and graphics.
What is FOMO in Crypto Coins?
In the crypto money market, it would be more accurate to say that the biggest fearful dream of the investor is to become FOMO or to be caught up in it. Someone who observes the
crypto money
he wants to invest in is waiting for an opportunity to fall, but when he sees that it rises even higher, he sometimes acts hastily and opens a position, and then he is disappointed when he sees that the decline has begun. When the price of a cryptocurrency is already quite high, the investor can continue to buy at the peak price due to FOMO impulses or continue to hold his money in the same coin while the price is at the bottom. This may cause the investor to lose money. It is actually the FOMO feeling that makes the investor do this.
The latest example of this happened during the giant bull run that started in late 2017, when many people got caught up in FOMO and bought crypto coins from the top and suffered huge losses with the declines that followed.
As we can see in the picture on the side, it is a picture of the experience of someone who has a sense of FOMO. In the part that says Buy, it is depicted that he buys and acts emotionally after sudden falls, and in the part that says Sell, he makes the sale and loses it together.
