How to Combat FOMO?

Perhaps, some of you do not know what FOMO is. But I think that each of you had the following experience:

  1. The coin flew up by 10-20-30% and continues to grow. You were not going to buy this coin now, but realizing that the profit is bypassing you, you are buying it anyway. But it remains in place for some time, and then starts to fall, leaving you in the red.
  2. You bought a coin, it made X2 and stopped. You do not want to sell it, what if it makes X3 all of a sudden? It falls by 20-30%. You already agree on X2, but it is no longer growing. Then you agree on 20-30% profit. But it keeps dropping and either sells at a loss or remains in your portfolio for a very long time, freezing capital.
  3. You’ve read that a promising new coin is coming out, which will be the “new bitcoin” (ether). Analysts promise big X, and they seem to promise it in a nice and reasonable way. You buy it, and the coin makes X. The only problem is that it makes X in the opposite direction. Now you face a dilemma - whether to sell it at a 90% loss, or leave it in the hope of growth? And you don’t like any of the options.

FOMO makes you do all of these things - the fear of losing profit. This is a powerful engine of the CryptoMarket, but it's better to make money on someone else's FOMO than to lose it on your own. This morning, half an hour after the start of the ONE trading on Binance, I sold my tokens. I’ve earned almost X7 and made money on FOMO, because of the loss of profit syndrome of other bidders that accelerated the price to such an extent. And those who bought these tokens from me at such a price, lost or froze their money for a long time, having suffered from their FOMO.

The main method to combat FOMO is to have a trading plan in place. You should understand your strategic tasks for the near future, the structure of your portfolio, and cut off everything that does not fit into these tasks. If you buy altos only from TOP-30, then no “VIP signals or insiders” should make you buy dubious coins. If you decide to participate only in IEO at Binance, then all other options are closed to you. If you have rules for entering and exiting a position - you shall adhere to them.

The way you enter a position is important, especially in margin trading. The larger the shoulder, the more important this moment becomes. The entry procedure depends largely on your strategy (position dimensions, availability of stops, goals by position). I always adhere to two basic rules: for the trend, enter only on pullbacks, in flat - at the lower border of the channel. Compliance with these rules makes it impossible to buy on highs.

How to exit a position? That have to be understood at the time of entry. Long-term positions must be held until the end of the trend. Short-term ones must have clearly defined goals for which it is better to set a profit. If the profit suits you, but you want to squeeze everything to the maximum, set a stop that will fix the profit when you pull back

If a trend trading is on, it makes sense to split the position both at the entrance and at the exit. On the one hand, you want to buy Bitcoin at 8200, on the other, what if it goes lower? Divide the amount into two parts and buy now half of the desired volume, with the possibility of extension when reduced. You want to sell for 9000, but how will you survive if it goes for 12 000? Sell the portion of it at 9000. If it grows further - your profit is growing too, if there is a pullback - buy again at 8500.

It is useful to keep a trader's diary. Write down your thoughts when opening or closing a particular position. And then record the result - how correct the decision was and what it led to. Most of the market situations are completely typical, therefore, record and accumulate your experience. This is the largest capital that will never take a beating.

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