"Buy! Sell! Buy! Sell!"
You hear the pundits scream on the local news. You open your phone and the top post on your preferred social media says Bitcoin is a scam while the richest man in America tweets about Doge. Fear starts to creep in, am I passing up on the next BIG thing? Fearing that inaction could prevent you from untold riches down the pipeline if you just buy and Hodl. This is The Fear Of Missing Out, aka FOMO.
Be you a seasoned veteran in crypto trading, or a beginning just learning the ropes, the coverage and discussion of crypto in the media can quickly become exhausting. For those that have been around, I'm sure you've learned that specific blogs give way more benefit than following most media. To the new comers, don't believe everything you read on the internet. I know what you're thinking, "Wait, someone can just lie on the internet?". Oh yea.
The anonymity of cryptocurrencies lends it way to freedom of use and a possibly decentralized currency without the need of major banks. It also lends its way to market manipulation and pump and dumps, but rarely do things work well the bigger they get, never mind perfectly. These benefits and issues blend into a perfect storm for finance beginners to crumble.
Buy! Buy! Buy!
The markets are climbing and your preferred coin has gone up 20% pre-market. New articles are talking about the boom, your friends ask you about that weird coin you were raving about 2 years ago. The hype is finally arriving and it's time to get yourself prepared. You spend the next couple of days making moves and prepping for the big buy. The price is climbing so you better get in fast. Finally you're all in, ready for to reap the rewards, all the due diligence will finally pay off. You wake up early ready to see your numbers climb.
Sell! Sell! Sell!
Down 30% in pre-market, you start to panic. As you channel surf your way to the nearest pundit, phone in hand delving into what went wrong, you think you may have waited too long. "Why didn't I buy more earlier in the week?" races in your head. Your friends text you, "I told you so" and the media is having a frenzy. You decide to sleep it off and try again tomorrow. Wake up, Markets down 40% again today. Your newest investment has vanished. You sell some safety shares and accept that you read the charts wrong. At least you made it out before losing it all.
Buy! Buy! Buy!
The dip is getting capitalized on. The charts slowly starts to flip, up 10%. Later in the day it stabilized back to a little over your investment from earlier in the week. Your fears sent you on a rollercoaster of gains and losses, only to end up with a net total loss as your coin of choice remains at the hype price that first started this saga.
This is FOMO
It happens to the best and worst in many aspects of life, not just trading and certainly not just cryptocurrencies. Research is incredibly important and at the end of the day, you know best what's best for you. Always be sure you only invest money you're willing to lose, this will limit the effects of FOMO. Always have a backup plan and an exit strategy. Remember your goals of when you first started, and if you're just starting set some goals and stand firm. There will always be the next big thing, and most people miss out anyway. The Fear Of Missing Out can be a very dangerous and costly phenomena when it comes to trading, especially cryptocurrencies.
You realize, maybe it's time to put the phone down and shut the T.V. off.
Give yourself a pat on the back, you're already ahead of the game.
Thanks for reading and good luck with your ventures!
