We delve into the root cause of FOMO and discuss few ways in which Fear of Missing Out can be tackled in trading
I have a habit of maintaining a file of all the setups i have missed. It may be due to doubt, family-time or just my office meetings
Over the period of past two years, the number of charts saved in my "MISSED SETUPS" files have increased. However , the trades I have taken have tend to give me consistent returns
This simply showed me that it is completely fine to miss a setup and no matter how much I try , I am bound to miss few names
The Psychological Angle:
Many people think that once they have system (Own or learnt or bought) they will mint money day in and day out. But a system is just a set of rules and it is a TRADER who is the edge.
Every system will be based on some set of principles and a belief in those principles through years of observations and practice is something which can’t be bought. It has to be drilled into our belief system by one's own self
Once done it becomes easy to psychologically understand that there will not be any shortage of opportunity and one trade will not make or break the account thereby overcoming any FOMO
The Practical Angle:
Once the psychological belief is set, Here are some tasks/actions to reinforce and tackle FOMO in trading:
Set a Trading Plan: Develop a well-defined trading plan that includes entry and exit points, risk management strategies, and predefined goals. Stick to your plan and avoid impulsive decisions driven by FOMO.
Focus on Your Strategy: Stay committed to your trading strategy and avoid getting influenced by others' trades or market movements. Trust your analysis and decision-making process.
Practice Patience: Understand that missing a setup is a part of trading. Accept that there will always be new opportunities, and it's better to wait for the right one rather than rushing into trades due to FOMO.
Limit Information Overload: Avoid constantly monitoring every market movement or seeking validation from social media platforms. Limit your exposure to excessive market information that can trigger FOMO.
Maintain Emotional Control: Keep your emotions in check while trading. Implement techniques like deep breathing exercises or taking breaks to manage anxiety or excitement caused by FOMO.
Remember, trading is a long-term game, and focusing on disciplined and strategic trading practices will help overcome FOMO and improve your overall trading performance.
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