Fear of Missing Out

FOMO is an acronym that stands for the “Fear of Missing Out”. This captures the feeling that many retail traders feel with regards to volatile assets.

The term is most commonly associated with cryptocurrencies though it can be extended to any type of investment instrument.

Newer or less experienced investors are constantly dealing with psychological pressures when investing in assets.

In the case of cryptocurrencies, what is in many ways an emergent field has given way to hysteria in some cases, with asset’s value rising seemingly overnight.

Understanding FOMO

FOMO can drive investors to do things like quickly selling other assets in order to have the opportunity to buy a particular asset that they are afraid of missing out on.

Because cryptocurrency markets move so quickly, FOMO plays a huge role in the value of any cryptocurrency.

Trading cryptocurrency can be an emotional rollercoaster. Indeed, cryptocoins rise and fall in value on a daily basis, experiencing volatility far in excess of more normalized assets such as stocks or currencies.

Pegged as a purely psychological phenomena, FOMO captures many of the potential issues that traders must deal with when investing, be it cryptocurrencies or anything else.

As a rule of thumb, it is important not to let emotions dictate all of your actions as a trader. Oftentimes, traders are not even aware that FOMO may be affecting their trading behavior.

When approaching volatile assets, proper and sound decision making should always be utilized and in almost every case, there is always another chance at a future date to have an opportunity to invest.