- Reviewed by James Stanley, Nov. 24, 2021
FOMO – Fear of Missing Out - is a relatively recent addition to the English language, but one that is intrinsic to our day-to-day lives. A true phenomenon of the modern digital age, FOMO affects 69% of millennials[1], but it can also have a significant bearing upon trading practices.
For instance, the feeling of missing out could lead to the entering of trades without enough thought, or to closing trades at inopportune moments because it’s what others seem to be doing. It can even cause traders to risk too much capital due to a lack of research, or the need to follow the herd. For some, the sense of FOMO created by seeing others succeed is only heightened by fast-paced markets and volatility; it feels like there is a lot to miss out on.
To help traders better understand the concept of FOMO in trading and why it happens, this article will identify potential triggers and how they can affect a day trader’s success. It will cover key examples and what a typical day trade looks like when it is driven by FOMO. There are various tips on how to overcome the fear, and the other emotions which can affect consistency in trading[2] - one of the most important traits of successful traders[3].
Main Talking Points:
- What is FOMO in trading?
- What characterises a FOMO Trader?
- Factors that can Trigger FOMO
- FOMO Trading vs Disciplined Trading: The Cycle
- DailyFX analysts share their FOMO experiences
- Tips to overcome FOMO
What is FOMO in Trading?
FOMO in trading is the Fear of Missing Out on a big opportunity in the markets and is a common issue
