How To Avoid Trading Based On FOMO

The fear of missing out on a profitable opportunity greatly influences our trading decisions. Mostly FOMO occurs when the price is at its extremes. It’s the reason why so many people buy high and sell low. This is the time when it is obvious to everyone what is happening and a crowd enters the market, driven by their emotions. Often FOMO is artificially created by a market maker to drive people into the market so that there is fresh money. You must understand that money does not grow in the market. It is simply a redistribution from one participant to another, so you need a constant inflow of new money or the old capital will not be earned. To avoid trading based on FOMO, don’t blindly follow the herd, say no more often when everyone is saying yes and avoid emotional decisions.