FOMO – The Fear Of Missing Out
This is FOMO—fear of missing out, is defined as “a pervasive apprehension that others might be having rewarding experiences from which one is absent.”
When you consistently “connect” with people, you become vulnerable to the comparison game and this can be extremely detrimental to everything you’re trying to achieve.
The FOMO can be a major barrier for traders. If you fail to understand and acknowledge it then you could be headed towards a path of destruction that you don’t even know exists.
FOMO causes anxiety by undermining confidence in your decisions.
The decisions might be as small as what currency pair should I trade today or should I wait for the economic data release before trading. This type of FOMO feeds the hypothetical, anxiety-provoking questions of “if only” and “what if?” Indeed, a number of studies have shown that those who experience higher levels of FOMO also reported lower levels of overall life satisfaction. This in turn leads to an inconsistent decision making process and is usually reflected in inconsistent and/or poor trading performance.
Think about it: When you go on the 247 Trade Zone, for instance, you may see a slew of updates along the lines of, “Dave: I made 50 pips on AUD, it was so easy,” and “Steve: another 100 points on GBPUSD on a simple technical trade.” Your first thought probably isn’t, “Wow, Steve, what a great job!” Instead, it’s probably closer to, “Ugh, everyone’s getting these great trading opportunities except me.”
But it doesn’t have to be this way. If you’re not used to the ups and downs of trading then trading will be stressful enough without you making all these unfair comparisons. One of the tricks is simply eliminating the incessant and mindless screen time that is one of the main after effects of FOMO.
One of the biggest misnomers in the trading world is around the term “Professional Trader”. To be a Professional trader doesn’t mean you automatically spend 12 hours in front of your screens. In fact it’s completely the opposite. It’s more like 1 hour broken up over 2-3 sessions.
I would consider a trader a Pro when they can refine their analysis to 20-30 minutes a day, you can fully automate and set your trade plan in motion without being at the screens all day, and you don’t give a hoot if you lose any money. Of course it also means making cash from trading as a living, but you won’t get there unless you get over the FOMO first.
How do you refine your trading analysis to 20-30 minutes a day?
This is where our T4T Complete Online Forex Trading Course comes into play. To refine your processes and upskill yourself you need to understand everything you’re doing. Understand market structure, why prices move and know how to trade those price movements. That’s it in a nutshell!
The Pro trader course will provide you with all the necessary knowledge to get you up and running and trading with confidence. Then it’s just a matter of experiencing the market for yourself to build your own method of analysis and execution.
Understand you’re not going to nail every trade
You first must accept that you’re going to miss out on a lot of trades that other people get. That could be for any number of reasons: you have a full time job, you live in different time zones, you have family commitments —you can’t always just switch on your screens at the drop of a hat and tune into economic data releases in the middle of the day. Sure it might not be fair, but to sound totally cliché, life isn’t fair.
When you come to terms with that (which is, of course, easier said than done), you can start seeking pleasure in knowing that rather than spending every moment obsessing over what others are doing and achieving, you’re waiting for the next best trade that works for you.
Now what’s the cost of FOMO, besides feeling anxious, envious, and insecure?
Well, in addition to the exhaustion of constantly weighing your experiences against others’, the result of FOMO is actually missing out. Hear me out on this one. Pretend you’re at a restaurant with friends, or home relaxing on your own, but when you check your alerts and updates to learn about a great trade that everyone cleaned up on, your mind stops enjoying and starts comparing. The result? We neglect the present. We end up devaluing and distracting ourselves from the most important social experience of the moment: the one we’re actually in. And yes, that includes enjoying some solitude.
OK, so what to do? How to put FOMO in perspective? Here are five tips to try.
Tip #1: Understand what you’re doing and your role. You’re a trader. Your role is to find the gorgeous trade set ups and focus in on the ‘entry’ levels. Once you’ve found that the rest of your plan takes over. So don’t stress about the result, instead focus on the next best trade that’s going to make you another 3-5% return.
Tip #2: Accept that trading has its ups and downs. Just like every job trading has its own daily grind. Of course the emotions of winning and losing initially may be difficult to come to terms with but once you accept that’s the result of your decisions then you should relax and let the market do its work. Being confident with your trade plan and knowledge should shine through and alleviate the FOMO. Don’t forget you’ve got one of the best capital management plans available and you should know if you stick to it you’re not going to lose your cash. Plus you’re going to have loads of winning trades and with your reward to risk ratio at 3:1 you’re going to make a lot more cash then you lose. In fact with a winning ratio of just 27% you will break even!
Tip #3: Understand that you can’t get every winning trade. If you’ve been thorough with your analysis then you won’t miss anything. Sure some traders may find an obscure trade or just be lucky enough to be at the screens when something random happened but these are things you can’t control so don’t stress over them. You can fight off the FOMO by having a habitual routine that ensures you fully analyse the market. So when you walk away from your screens you’re not worried about missing anything because you’ve already checked everything. Simple right!
Tip #4: Automate your trade plan. A lot of people spend all day at the screens because of the FOMO. This is not only a waste of time but really unhealthy. So instead of waiting for that one random event or news release you should plan your day. We have an economic calendar which shows us the full schedule for the week. Plan when you should be at the screens and when you shouldn’t. Then go one step further and automate your trade plan. It may sound robotic but it’s absolutely the best thing you can do. In fact I built the Trendline Trader software to achieve this for myself. It’s amazing how good a trader you become when you don’t interfere with your positions plus you’ll never miss another good technical trade again. If you’ve got a full time job then this is absolutely essential.
Tip #5: Embrace the JOMO. The Joy of Missing Out is extremely powerful and it’s what brings me back to the market each day. If you want to be a Professional trader then learn to disconnect from the market and enjoy the freedom your lifestyle allows. If it’s a nice day do your analysis, automate your trade plan and get out there and enjoy your day. You’ll be surprised at how well everything will click together when you’re less anxious about missing out on a trade or a release. Plus you’ll find when you do come back to the 247 Trade Zone you’ll get a buzz out of other people’s success instead of it being a negative experience for you.
Don’t underestimate the power of your emotions
I don’t think enough has been said about the psychological trauma that many people go through when trading any financial market. I was fortunate enough (or unfortunate it just depends on which way you look at it) to be trained to be emotionless and aggressive by the banking systems. We are trained currency mercenaries that thrive off the pressure. The more the better!
Now I know that’s not the same for everyone. You’re dealing with cash and that’s real…it pays bills, your kids’ education and many other things. If you fail it impacts everyone around you. But you seriously can’t think like that. If you do then you’re putting yourself under so much pressure that nothing is going to work. You’ll be freaked out when you’re in the cash as much as when you’re out of the cash. If you have these feelings then you shouldn’t be trading at all.
If you can overcome FOMO and embrace JOMO it will go a long way towards taking control of your trading and your trading performance will follow this harmonious path because you won’t be stressing every time you sit at the computer and place a trade.
Remember, you’re the entry guy. That’s your job. Find the good trade sets, stick to the plan and let the market do the rest. You’ll be surprised at how quickly it can all be turned around.
Don’t forget to go through the Trading Psychology section of the Pro Trader course where we cover this in detail.
If you’re expereincing FOMO be sure to reach out as i’d be more than happy to discuss what’s happening with you.