Today we are going to be looking into tips to overcome FOMO. I mean, I love this because this affects over 70% of traders. If not more than that. And especially when we talk about the millennia, this FOMO actually affect over 68%, you know has the study shows. So that is the topic we’re going to be looking up to this. I will encourage you to hang around till the end of this video.
So the agenda for today, we’re going to be looking into what is FOMO in forex trading. What characterizes that FOMO forex trader. Cause that can trigger fomo,fomo trading versus disciplined trading. We’ll look into the cycle and how you can avoid that. Then I’m going to be also be looking into my fomo experience, if not experiences.
And I will encourage you to also share yours below this video. Then we’ll look into tips to overcome fomo.
So let’s look into what is FOMO? You know this has joined our dictionary words, you know. FOMO is simply fear of missing out. It’s affects both newbie and pro. It doesn’t matter where you are in trading either you are a big or small account owner. It doesn’t matter. FOMO in trading is the fear of missing out on the big opportunity in the Forex market. Okay.
And it’s a common issue mega-traders will experienced during their career. FOMO can affect Everyone, as I’ve said before, from new trader to professional Forex traders. It doesn’t matter who you are. It’s like, Oh my God, I don’t miss out of this trade. It affect everybody. So, emotions are often a key driving force behind FOMO. What drives FOMO is emotion.
Okay. If you live emotion out of the game then you will be able to control yourself. So if left unchecked, they can traders to neglect trading plan. Of course, you know, as a Forex trader that you need to have a trading plan, which condition makes you to decide to enter a trade? okay,If this happen, I go long, if this happen, I go shot. I exit my trade. You know, by now that you shouldn’t be entering the traded without knowing how much you are going to risk.
If trade goes in your favor, how much you could make so on and so forth, those are part of your trading plans. So now when you’re talking about FOMO, it makes you neglect your trading plans. And of course it makes you to start to using unnecessary risk. Okay So emotion is a driving force behind FOMO if left unchecked, they can lead traders to neglect trading plans and exceed comfortable level of risk.
By now you’ll know that I do say,do not risk more than 2 to 3% of your account.but when FOMO steps in you see people risking up to 10%, 20%, even 50% of the account, that is crazy. So common emotions in trading that can fit into FOMO include greed, fear, excitement, jealousy, ambitions, anxiety.
Let’s talk about greed. You know, you have a goal, your daily goal say today am going to make 20 pips, 40 pips and after you have reached your goal, now you see the markets moving you just say okay, know what, I’m going to fetch more. I’m going to have more pips. And immediately , you enter your trade. You discover that the markets start going against. It happens to me always as I’m still working in controlling and preventing it.So this video I’m present for you. I’m also great I’m also creating for me.
What about fear? Okay, you have a trade that is actually profitable.
But you know, you just look at it, you know what , you are scared. You are fearful you exit the trade or you see maybe some news release is coming and you have this fear that if you don’t join, or if you trade that particular news or event event you might lose money. That is fear. Excitement. You are so upbeat that you are so excited.
You are making money. And instead of you to just close the shop, and go home for the day, most especially if you are a day trader. You just say, you know what trade. And before you know that single trade you place more will actually ruin the profit you make for the day. What about jealousy. Especially if you will belongs to one WhatsApp group or the other Facebook group or LinkedIn, or you will follow one group or a page.
You see people sharing their profits and maybe you, you just look at it. Oh my God,I’ve not make what they make. See you don’t need to be in competition with anybody when you are a forex trader. You only need to be in competition with you. You have your daily goal. If it is 20 pips. And remember 20 pips that you make today might be $20. Might be $200, might be $2,000. So don’t focus on the dollar focus on the pips because we make our money in forex trading by harvesting pips. What about impatience.
Okay Trade will always be the trade will always be there. So if you can’t trade today. Just wait for another opportunity, if you can’t trade this opportunity wait for another one. You know that the patient dog eats the fattest bone.So when you are patient enough for right set up got bishops and no for right set up, for right opportunity, you would make more than even when you went in a hurry. Then anxiety, oh my God this happen to most Forex traders.
Oh, if I don’t place this trade now I might lose my money or I need to trade quickly. No, you need to what, avoid anxiety while you are trading. Okay, so let’s look into a typical FOMO trader experience, typical FOMO experience. You see you start this, okay This is the market. The market is going up, it’s going up. Then this is where FOMO steps in you.
See people start getting so excited may be you have a trade that has given you some profits up to this point. you are so excited. You keep repeating the same buy and immediately you buy market start going against you. Then around this place Now you are anxious, anxiety sets in shows I’m scientist steps in you are fear that, okay, he got fearful that you might lose your money. Then market is going down,then you start to sell.
You are selling the market reverse again started going back up.And the cycle repeats itself. It’s repeating itself over and over and over and over again. So that is FOMO trader’s experience. You can avoid this. Once you place a trade, you enter your trade, put your stop loss if your strategy involves using stop-loss. Put your take-profit. If you are going to manage this trade either by training stuff or any other method, set it in place and let the trade run. So by that you will avoid this repetition of cycle that affects most FOMO trader.I hope you are getting this and you are feeling this.
Okay So now let’s look into characteristics of most, you know, FOMO traders. They have the same language. You know, when you have a set of winners, they have the same set of language they live by. And when you have losers, they also have languages they live by. The same thing a trader who always gets affected by FOMO they have these seven common sentences, this common words that they say. Trader who act on FOMO will be driven by set of particular assumption.
So assumption number one,they are all doing it. It can’t be that bad. You are not here, you are not there.Okay. So you are you. So you do you.
Number two, just think how much money I could make. You are not in competition with anybody as have said.
So, make sure that you set your daily goal, stick with it and ofcourse move with it.
Number three, I would give it a go. Don’t give it a go. If you’re not sure of that trade, don’t enter a trade. I should have know that would happen. No regret.Stop regretting when you trade forex. Oh, I should have enter that trade. Oh, I should have know. Stop regretting. Okay. when you regret, it’s part of attribute of FOMO.
Okay. They must know something possibly I don’t, may be talking about people doing maybe possibly better than you.And you assume that these people know more than what you know. It’s not true. So stop saying that.
Oh, I’m scared. I will miss a good opportunity. Okay. So what if you missed a great opportunity today another opportunity will come tomorrow.
Okay. The last one, the Yen is credit safe bet, right everyone is trading.If everyone is trading Yen or GbpUSD, that does not mean that you also must trade it. If your trading plan does not go down to trade the currency pairs you are comfortable with. For example, I’ve never trade gold. I’ve never traded silver.I don’t trade precious metals. I don’t trade futures. All those sort of things. People are making money in it so it’s not just my own thing. So I stick with either currency pairs or indices and that is what I do.
Okay. So you try to be you. Okay. So what factors can trigger fomo trading?We’ve talked about this before. I will quickly run through these five factors.
Number one,volatile market.
Number two, winning strips.
Number three, repetitive loss.
Number four, news and rumors.
Number five, social media especially forums, groups, and so on, so forth.
Okay. Let’s talk about the volatile market, when especially during the news.You know,you just see a chance to move in. Oh my God oh my God and you chase the price, you buy it, you buy into it and the market goes against you. Or big winning strip. You just want your trade. One, two, three, instead of you to close the shop and go home. You still want the place another trade and I know that trade that trade that you place might end up affecting. And ofcourse repetitive loss, you loss first and second trade and you say oh, the next trade I must make up for my loss. Then you engage in what is called revenge trading.
Okay. You know, normally you’re supposed to trade 0.1 lot size then because you want to recoup your loss. You put a trade for 1.0 lot size that also , you lost it. I mean, news and rumors. There are four ways by which you could deal with news. We will treat that in another video. Okay. So if you know, you cannot trade a news, avoid it. Then rumors especially when you belongs to one group, one forum or the other.
And of course, lastly, social media, you see people posting different things, different signals say on WhatsApp groups, on facebook groups, on telegram groups and you quickly jump on it. Whether they’re right are wrong. You don’t know were they get the signal from. Just because you saw the signa, you didn’t even practice it on demo account, you landed it straight on your life account.
And you start crying.I receive messages all the time, all the times from people in this categories. You can avoid all of this. Okay. I’m going to stop for today. We’ll continue this video tomorrow. Make sure if you have not liked our page , like this video, share this video with your friends and then make sure that you subscribed if you have not done so.Okay. I’ll, we’ll see you tomorrow. We shall continue from where we stopped. Today, we have looked into what is FOMO in trading, the characteristic of FOMO trader,factors that can trigger FOMO and tomorrow we will be looking at FOMO trading versus discipline trading, the cycle, how you can avoid that. I will share my FOMO experience and tips to overcome FOMO finally tomorrow. Have a beautiful day.