Last Updated on February 7, 2022 by Diana Kelley
Many people are afraid to miss important events. The same phenomenon is noticeable in trading. It is called the loss of profit syndrome (or FOMO). In this article, we will explain how it affects crypto users and enthusiasts.
FOMO (Fear Of Missing Out) is a loss of profit syndrome. Nowadays, it is especially common due to the popularity of smartphones and social networks. Many are simultaneously afraid of social isolation and worry about missed opportunities. A similar situation is possible in trading. As soon as traders see a formed bullish trend (growing channel), they start to open trades and buy those assets that correspond to the technical analysis. Besides, a lot of information, opinions, and impressions are concentrated around us, which only aggravates the situation. Let’s figure out how to deal with this obsessive fear.
FOMO effect
Lost profits syndrome refers to a strong fear of missing out on an important event or opportunity. This fear is especially pronounced against the background of the bright life of friends and acquaintances. After all, then there is a feeling that you are wasting time. VTS is directly related to dissatisfaction with personal life, and social media only exacerbates the unpleasant state.
The more dissatisfaction, the stronger the desire to find their kind. And the need for new information turns into annoying thoughts.
FOMO stands out for the following features:
- Frequent fear of missing out on something important
- Constant use of “everyone but me” speech patterns
- The desire to delve into all sorts of forms of social communication (attend all parties, go to concerts, etc.)
- An obsessive desire to always please others, accept praise and be available for communication
- The need for constant updating of the feed on Facebook, Instagram, and other social networks
All this leads to a decrease in mood, and in isolated cases – depression. Most often, FOMO manifests itself as feelings of boredom, apathy, and loneliness. Also, people with lost profits use social media to express themselves.
A simple test for identifying FOMO syndrome in finance
You can also check yourself for FOMO. We suggest you take a short test. Read each statement and answer honestly whether you agree with it or not:
- I always closely follow the prices of stocks, cryptocurrencies, fiat, or other assets.
- I am afraid to miss important news that can provoke an increase in the price of an asset.
- A smartphone is an extension of my hand, so the gadget is always with me and I always monitor the assets that I bought
- I always check my messages on my phone as soon as notifications arrive, afraid to miss something important.
- I am afraid at some point to be left without gadgets that are part of my life.
- I strive to respond to messages on time and keep track of important news, because I may not see something urgent.
- I always check for new posts and messages in social networks in my profile or on the pages of interest to me.
- It hurts me if I didn’t buy a crypto asset before it went up in price.
If you answered “Yes” to 5 or more statements, then you may suffer from loss of profits syndrome.
How to get rid of lost profits syndrome?
By constantly responding to messages and checking the cryptocurrency rate every 3 minutes, you are wasting a lot of time. Therefore, you should establish clear rules for using a PC and a smartphone:
- Remove unnecessary applications and disable pop-up notifications in those programs that are not of great importance;
- Leave groups and unsubscribe from accounts that are not useful to you;
- Refuse unnecessary email newsletters;
- Check news and stock quotes no more than twice a day (for example, in the morning and the evening);
- Do not take your smartphone to bed or surf the Internet before falling asleep;
- Create two separate schedules for personal and business messages.
It won’t be easy at first. Therefore, take these steps gradually to get used to the new way of life without unnecessary hassle.
FOMO-FUD cycle
These words mean psychological manipulations that are designed to form the necessary opinion of society. It is used not only in marketing and propaganda but also in trading. The FOMO-FUD cycle is also called the “fear and greed cycle”.
According to the American neuroscientist and philosopher Bobby Azaryan, during the cycle, the disseminators of fear and greed conduct psychological and informational warfare. Its goal is one – to attract an interested investor and grab his attention. Sometimes such attempts are crowned with success because, in the crypto world, the opinion of other people can bring not only benefit but also harm.
Also, the creators of cryptocurrencies are fighting not only for investors and their money: they do everything possible to ensure that no other token exceeds their asset in value and does not exceed their capitalization.
At the same time, Azaryan notes that although the FOMO-FUD cycle is an interesting topic for research, it has serious material consequences for traders. Therefore, they should be indifferent not only to sensations in the cryptocurrency market but also to skepticism.
FOMO in crypto trading, investment or lending
And since we have already mentioned that the loss of profit syndrome is about trading, let’s take a closer look at this issue. So, in the crypto world, the topic of FOMO is especially important. Because during uptrends in the market, many believe that if you buy an asset at the stage of its value growth, then very soon it will bring a considerable profit (this is a kind of cognitive distortion).
And yes, very few people stop believing in the cryptocurrency market after this. Until the next “to the moon”. If an investor listened to others and also invested in an asset on growth, guided by someone else’s opinion, then he will not think with his head. But this is precisely the main skill of a successful crypto trader – to understand the market, always think with your head, and have your own opinion.
Also, do not copy someone’s profitable trades and collect the same investment portfolio like that of a recognized trading guru. Remember – everyone has their developed strategy, clear goals, and prospects. Not everyone is equally willing to take risks. Therefore, it is not always worth imitating other traders, but you can listen to the opinion.
Your strategy is key
If you manage to accumulate knowledge in some area of trading, learn fundamental and technical analysis, know how to set goals, and assess the potential of this or that token – this will bear fruit, but keep developing further, because there is no limit to perfection!
Every day, new trading tools, technologies, and new tokens appear that promise to bring significant profit and make cryptocurrency trading as convenient as possible. Do not chase the machinations of speculators. Become the best in your field. Keep a clear mind and do not be influenced by the masses.
