Do you suffer from “the fear of missing out” or FOMO? Do you find yourself on the losing end of trades because of your fear of missing out, wishing you could rewind time? FOMO is one of the most common mistakes a trader will make and can be detrimental to your trades.
In this week’s video, you will follow along while I place three separate day trades during the nonfarm payroll news day on June 7, 2019. You will see how even a seasoned trader, like myself, can fall victim to FOMO now and then. We will also discuss, more importantly, how to recover and learn from your mistakes made because of your fear of missing out.
I wish I could say that I’ve become immune to FOMO, but just like you, I too allow FOMO to dictate my trades occasionally. This day would turn out to be one of those times.
It started when I spotted an aggressive scalp trade. Instead of sticking to my original entry, which would have led to a breakeven trade, I grew impatient, let FOMO get the best of me, and I started to chase that market. This decision resulted in me entering the trade late and having the market reverse and stop me out of the trade, where I actually should have entered in the first place. The consequence of my FOMO was a small loss rather than a small gain.
Thankfully, my day ended better than it started. My last trade of the day was a successful trade which, in turn, helped me to recover from my small loss earlier in the day.
As traders, myself included, discipline is one of the most important traits we can possess. The fear of missing out has caused a lot of traders to lose a lot of money in the stock market, forex market, and the futures market every day. A positive reward to risk ratio and discipline, however, can overcome FOMO and help you become the successful trader you hope to be.