FUD and FOMO are Two terms that refer to the psychological fear of missing out syndrome, the fear of missing out on an opportunity on something is common in the field of financial investing. This syndrome happens to everyone, including financial investors. It often has more negative consequences than positive ones. Below we will analyze in more detail about What is FOMO? and how to overcome this psychological syndrome in trading.
Overview of the FOMO and FUD syndromes.
What is FOMO?
FOMO is a psychological syndrome that is not very strange for traders when participating in trading. Especially novice traders often suffer unfortunate consequences. FOMO stands for Fear Of Missing Out, which means fear of losing. People with this syndrome often suffer from the feeling that they have lost something. And when that mindset reaches its peak, they often make irrational decisions, causing more or less consequences.
What is FUD?
FUD stands for Fear Uncertainty Doubt. It is understood as one of the terms in Forex that refers to the syndrome of fear and doubt about a certain subject. Victims of this syndrome will have feelings of anxiety and will live in anxiety and anxiety. FUD is a tactic to spread fake news. This effect affects the viewer's perception by creating false information.
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What are the effects of FUD and FOMO syndrome?
This FOMO effect also occurs frequently in everyday life, not just in financial markets. In the field of Marketing, FOMO is used as an effect that creates scarcity and urgency. Thus strongly promoting the purchase process of users without knowing the product.
The FOMO syndrome is an emotion in which investors feel they must buy an asset for fear of missing out on a profit opportunity. Investors with this mindset invest from one asset to another. This is like a music game. This signals a bull market in the next stage.
In the field of currency trading, when a currency is on the rise, victims will have the mindset to buy immediately. They think they will make a big profit, so they buy quickly without finding out. This action is known as the FOMO effect. This not only affects personal interests, but also the market price.
The FUD effect causes panic among investors when they hear bad news about the market. They will quickly sell their assets without carefully understanding the market. This affects not only personal interests, but also the market price.
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How to overcome the FUD and FOMO syndrome in trading
FOMO syndrome is a common syndrome among new traders when psychology is not stable. That's why in previous posts I mentioned psychological problems when trading. To avoid unfortunate mistakes, observe the following rules:
perseverance mindset
This is considered one of the important factors in trading. A strong and consistent mindset helps you make the right decisions. You will be able to distinguish what is wrong as well as what is the right direction for you. Especially the nature of making unintentional mistakes and mishaps.
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Understand the market situation
Understanding the market is a principle you need to take seriously. This is a prerequisite to help you trade more efficiently. Understand the market to know where the opportunities are and where the risks are. From there, decide what the next step will be. Note if you notice the coin is FOMO and overpriced. So a safe thing for you is to stay out of this game. Keep an eye on the market situation and learn lessons for future transactions.
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Effective capital management
Believe me, you will be more successful if you know how to allocate and manage capital effectively. Equity splitting will help to minimize the risk caused by the FOMO effect. Effective capital management also helps to maintain a fixed profit.
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Cut losses at the right time
In case you are already suffering from FOMO, do not hesitate to reduce your losses. Look for other stop loss opportunities and keep a certain amount of capital. You should not regret cutting losses to see the asset “evaporate” gradually.
Determine your investment style
Investment styles include: short term, medium term and long term. By determining your investment style, you will be able to make a decision if you are affected by FOMO. If you are short term, FOMO can be profitable for you. If you are in the medium or long term style, it will have negative consequences.
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Conclusion
Above, kiemtien.com shared with investors some information about What is FOMO? as well as analyze how to overcome this psychological syndrome. Financial investment depends a lot on market knowledge and experience. However, training yourself to be mentally stable and fast will also help you invest more effectively. Good luck!
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