When emotions hit you: FUD and FOMO
If you feel that your emotions and your investments are being manipulated, you are falling for these terrifying words.
I am sure that any of us has fallen at some point in that compulsive desire that we cannot control, we have let ourselves be carried away by something we saw, read or talked to someone, and it certainly has not been the best decision we could have made because we were taking it without foundation.
In the world of markets there are many emotions, sometimes we feel like we are on a roller coaster, even having studies, even having analyzed the graphs, we are human, controlling our feelings is not always an easy task, especially when talking about money. FUD and FOMO, fear translated into 7 letters.
FOMO (FEAR OF MISSING OUT)
You see the price of BTC and it goes up and up and up, you want to buy, you don't want to miss the opportunity, you know someone who bought and is already making a profit, you buy at its highest point and then... it falls! Don't worry, I've been there, it's happened to me many more times than I'd like to count and in several crypto and NFTs. FOMO at its best. It is a psychological effect that leads us to make bad decisions, and that is why we should never, EVER, invest in a financial asset without having analyzed it and above all, even having analyzed it, follow your risk management. It does not mean that you are not going to have losses, but at least you minimize them to their minimum expression.
FUD (FEAR, UNCERTAINTY AND DOUBT)
These words are repeated a lot throughout the internet, "it is an unethical practice", and I totally agree, unfortunately the financial markets are very manipulable and especially cryptocurrencies. But what does it mean? Basically spreading fake news, making us all feel fear and our confidence becomes a doubt about an investment we have made. And you may wonder, and what do they gain with this? For all the small investors, this is a nightmare, because if a whale wants to buy cheaper, he gets out of his position and it will definitely affect the market, or if the false news takes effect and many close their positions, the price collapses and the big investors take the opportunity to buy.
"Financial markets are designed to transfer money from the impatient to the patient"
Warren Buffet.
Now the question is, should you give in to FOMO and FUD? That can only be answered by you, because only you can manage your thoughts and emotions. Remember that fear and greed are fundamental factors when investing, in fact there is an index with which we can see the market sentiment, and there are those who take it very much into account for their operations, I share it with you so that you can take it in consideration.
As you can see, there are tools to overcome these situations, and there are also other relevant tips, such as:
Choose a trading strategy that you are comfortable with and learn to trade before you trade.
Be patient, forcing your operations will only generate unnecessary stress.
Feel comfortable with the amount invested, if it is a lot reduce it, and do not use leverage unless you like adrenaline and have been trading for many hours, so you have a plan that you can stick to.
Constantly analyze each trade, so you can identify errors and improve.
To conclude, if you feel like you are struggling to make money trading, it is because you have emotions that play a negative role for your growth and understanding of the market. The first and best thing you can do is recognize them and try to manage them so they don't affect your decisions.
There are books that are a must read, and definitely the one I want to recommend is one of them, read it and reread it, analyze it, get the most out of it, with it you will know yourself.
When emotions hit you: FUD and FOMO
FOMO IS A HELL OF A DRUG DACO
FOMO is chasing me everywhere 😖