Direct from the desk of Dane Williams.
FOMO, or Fear Of Missing Out, is an acronym that resonates strongly with forex traders just like us.
The anticipation of a potentially life changing market move coming just around the corner, will always stir a unique blend of excitement and anxiety unfound in other pursuits.
Specifically in forex trading, where opportunities appear and vanish in the blink of an eye, the fear of missing out isn't just some fleeting emotion.
It's actually a powerful force that can drive our inspiration to sit down in front of our screens each day and chase the dream.
Let’s take a deeper look.
The psychology behind FOMO
Understanding the psychology behind FOMO is crucial for forex traders.
It's more than just a desire to be part of the action, but in our game the real fear come from potentially missing out on profitable opportunities.
Potentially life changing profits at that.
The constant flux of the forex market can intensify this psychological phenomenon, making us second guess our decisions and tempt us into impulsive trades.
Why it’s stronger than normal in forex traders
The potency of FOMO in forex traders is of course heightened by the involvement of money.
Every trade represents a financial risk and reward, making the fear of missing out on a potentially lucrative move potentially overpowering.
The dynamic nature of the forex market, combined with its 24/5 trading schedule, amplifies the sense of urgency that forex traders specifically feel.
All conspiring to make it challenging for those of us who choose this game to step back and take a breather when even our strategies are screaming at us to do so.
How to overcome FOMO in forex
To conquer the grip of FOMO, you have to adhere to your well defined, tried and tested trading strategy.
Having a set plan provides a roadmap for clear decision making, helping to counteract the impulsive urges brought on by FOMO.
Confidence in your strategy is equally vital, trusting the process and sticking to your analysis will shield you from the emotional rollercoaster induced by having real money on the line at all times.
If you’re really struggling, mechanical trading strategies can be extremely helpful in the battle against FOMO.
This entirely rule based approach to trading takes the emotion away, forcing you to blindly rely on a set predefined criteria to enter/exit trades.
By automating your trading process in this manner, you will create a disciplined framework that minimises the influence of impulsive decisions driven by the fear of missing out.
Final thoughts on overcoming FOMO in forex
As a forex trader, overcoming FOMO is a war you’re going to have to fight if you want to make money over the long term.
Its psychological impact, especially with the high stakes involved, is undeniable.
Nevertheless, armed with the knowledge of its workings, coupled with the commitment to stick to your trading strategy, you can hopefully become fully confident in your mechanical trading strategy and effectively curb the hold FOMO has on you.
May your trades be guided by rational decisions, helping you reach a level of consistent profitability.
Best of probabilities to you.