Home / Beginners / Are You A FOMO Trader? 8 Things FOMO Traders Say

Are You A FOMO Trader? 8 Things FOMO Traders Say

At any given moment of the day, there are thousands of markets waiting for you; hundreds of thousands of charts are moving 24 hours a day, 5 days a week and every tick means that you could make money.

Dealing with missed trades can be a real challenge for traders and every day you have to deal with all the money that did not end up in your trading account. Seeing how much you could have made can often pose great challenges on a trader’s mindset and then lead to great mistakes.


8 things a FOMO trader says

If you find yourself among the following points, FOMO trading plays a role in your daily routine:

  • “I knew it!” – the trader who followed a setup but didn’t take it
  • “Not this time.“ – the trader who enters too early after a missed trade
  • “I could have made so much money today.” – trader beating himself up with the benefit of hindsight
  • “I waited so long for this trade.” – the overly anxious trader stalking a setup with a trigger-finger
  • “It still has room to go.” – the trader who jumps in late after being too scared to enter first
  • “I have a feeling…” – the trader reasoning himself into a trade without all entry criteria
  • “One time.” – the trader in a speculative trade, hoping to get lucky
  • “I just enter with a small position.” – the trader justifying breaking his rules


What drives FOMO trading (Fear of missing out)?

Trading is an activity without a clear beginning or ending and as soon as you start your trading computer, you are in the middle of the game and it does not stop – ever. In an activity without a beginning or ending, you can always make decisions and at any point in time, you could enter a – potentially – profitable bet that could make you money.

A football game, a roulette spin or blackjack have defined beginnings and endings; you know when to start and after the game is over, you can’t change anything. You have to accept the outcome. It’s not open for interpretation; you (your team) have lost or won.

In trading, the “game” never really starts and it doesn’t end either. And the outcome is never really finalized until you close the trade; and even then you can just get back right in. With every tick you see in the market there are profit potentials and you are just one mouse-click away from – potentially – entering a trade that could bring you a lot of money. Missing a trade seems like leaving money on the table.

Now, let’s take a look at the three scenarios around FOMO trading.


1-  You enter early because you don’t want to miss out

How often did this happen to you? You created a trading plan, waited for all things to fall into place and then, just before your setup is completed and price reached your entry level, price is starting to take off and it looks like it’s going to leave without you?

You can’t let this trade leave without you, right!? So you enter early, violate your trading rules. Entering a trade too early means that your risk is completely off because your stop loss is going to be much further away because of your early entry. Furthermore, do you add to your (losing) trade once it reaches your original entry level and increase the risk even further? Those 2 points show why an early entry completely throws off your position sizing and risk management.

And what happens afterwards? You end up with a losing trade because, after all, you never saw all your entry criteria confirmed and you had entered a trade you shouldn’t be in in the first place.


2 – You wait for price to show the perfect setup and then miss the trade

Missing a trade that leaves without you because the entry signal happened too early and without really showing you all the criteria is painful. Traders who are in a “missed a trade” mindset tend to chase price or enter the next trade earlier – we just saw why this is a bad idea.

Traders who miss trades interpret the event completely wrong. In the end, it wasn’t a setup based on YOUR rules after all and you have your rules for a reason. Sure, sometimes you could end up with a winner violating your rules, but over the long-term, your rules protect you and your capital.

Always remind yourself: a scenario might have been an acceptable trade based on someone else’s rules but it’s not for you! Profit-opportunities will occur ALL THE TIME and you won’t participate in all of them. Your rules will only enable you to engage in some of the millions of opportunities that exist every day.

Missed trades cost nothing. Click To Tweet


3- You wait until you get the perfect setup

Of course, this is the ideal scenario and the way it should be. There are ways to get into the right mindset so that finding good trades doesn’t have to be a seemingly impossible task, but becomes the norm.

A trading plan and a trading checklist are two must-have tools for traders and we have talked about both before. In you trading plan you map out potential trade scenarios so that, once your trading sessions start, you only have to wait until your entry criteria are met. The checklist holds you accountable and visualizes the trade progress. Violating your trading rules becomes much harder if your plan and checklist tell you to stay out and you have to convince yourself why violating your trading rules is the right thing to do.

“I review my checklist. It’s a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I can’t overlook it.” – Marty Schwartz


FOMO trading

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  1. Hi guys,

    I just want to say that your articles are great and every new trader should read them over and over again.

    Tx for sharing your knowledge.


  2. Hi ! I’m newbie to crypto trading, and this is a Great Post !

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