What is FOMO?
We have all been there had a prior obligation like work or a party to go to then we get presented with another event the same day and close in time. Due to time restrictions and location, it would be impossible to attend both. Which then puts you in a dilemma and you may not know which way to go. Your conscious is telling you to be responsible don’t skip out on work; these ladies and gentlemen are called FOMO feelings. Unfortunately, these same human instincts affect traders on a daily basis. To overcome day trading FOMO takes a lot of discipline and commitment.
FOMO (Fear of missing out) is the feeling of anxiety that you are either not in the know or missing out on data, events, experiences, or life decisions that could make one’s life better. FOMO is triggered by the amygdala; the part of the brain that senses whether or not something is a threat to existence. It is said that FOMO can affect anyone; it doesn’t matter who or what age you are. The crazy thing about FOMO is that it’s everywhere but no one can pinpoint where it originated from.
Studies estimate that around seventy percent of all adults in developed countries suffer from that tormenting emotion that something is occurring and they’re not part of it; also known as FOMO. Research suggests that people are twice as affected by losses as they are by gains. So, it makes sense that our nature is to avoid the agony of missing out. Then when we find out we missed out we dwell on our loss.
How Does FOMO Affect Day Trading?
Whenever you tie money and emotions it’s going to affect you and this is how FOMO is relevant to day trading. You might be new to day trading or have been at it for a while one thing that is stressed over and over is to stick to the studied and tested strategy. But what happens if you get caught up with work or running an errand didn’t take the moment like you normally would and analyze your chart before purchasing a call or put. You deviate simply because you see that the stock market is dropping and you act on impulse and purchase a put because you don’t want to miss out on that chance. But what happens? Quickly the market shifts and now you are at a loss.
This occurred because you did not want to miss out on an opportunity. Human nature is to essentially self-talk as if you have pros and cons balance lifted over your head. This balance is what you use to justify things and go with whichever side is heavier. You make excuses as to why you ignored strategy and went with a knee-jerk reaction instead.
How Do I Conquer FOMO?
The best thing you can do when in a FOMO scenario is to speak out loud instead of talking internally. This would be considered a grounding technique. Grounding techniques are classified as relaxing and pleasurable activities that decrease stress and anxiety. When you are anxious, you are out of touch with the current moment. Anxious thoughts are past and future-focused.
Verbalizing helps you reconnect to the present is a way that can help you pull away and help you deal with FOMO. This technique helps distract you from what you’re experiencing and helps you refocus on reality instead of FOMO. Describing the trade out loud will associate you with the current situation. It will help you gain control of the current movement and keep FOMO at bay.
This is why verbalizing what you are seeing will help to ground you when experiencing FOMO. What are the positions of the other candlesticks around? How has the day been trending so far? Have any Doji candles formed? Have you identified the hi and the low of the day so far? Dis you label your supply and demand zones?
You need to revert back to your training and the strategy you are using. So, it can be clear is there a solid reason behind your trade or are you simply justifying your FOMO impulse. Repeating this over and over when confronted with day trading FOMO will help create muscle memory.
What is Muscle Memory?
When a movement is repeated over time, the brain creates long-term muscle memory for that task. The brain eventually allows it to be performed with little to no mindful effort. This process reduces the need for attention and generates maximum proficiency within the motor and memory systems. Research suggests that 2 to 4 weeks of strength training makes neurological adaptations. We’ve all heard the expression; “I could do this with my eyes closed”. What this means is you could do the task easier because you have done it many times in the past. You can train your mind to overcome FOMO for day trading.
This is why police officers will practice taking their gun out of their holsters and putting it back in quickly over and over again. Why do you think this is? No, it’s not to be the fastest in their department but to develop muscle memory. So, police officers practice the holstering and unholstering of their weapons so in the event they need to get to their weapons they can do so with minimal effort. When placed in stressful situations FOMO is considered; you develop tunnel vision which can prevent you from looking at everything as a whole.
Tunnel vision can also be seen with day traders who experience FOMO and instead of looking at the whole picture they look into one aspect. The more important the goal is perceived to be, the more likely a person is to focus attention on it. This is why it is important to keep a tight rein on FOMO to avoid getting distracted and putting yourself in a position to lose money. We are all looking to move ahead and we won’t be able to if FOMO is keeping us back.
When experiencing FOMO while day trading remembers to slow things down. Look over your chart carefully then verbalize and talk about what you are thinking about doing out loud. Do this every time you are presented with FOMO on an opportunity that you think you might place a trade. Over time it will become second nature to you and will help you make better decisions and put FOMO behind you.
Going From FOMO to Peace In Day Trading
Everyone wants to be part of something because it is in our human nature to have the need to belong. The question then becomes, which would you rather be part of success or failure? You have learned all the pieces of the puzzle you need to find peace when presented with day trading FOMO. You have learned the grounding technique that will help you get past FOMO; which is verbalizing. You have also learned with practicing this technique you will develop muscle memory. You have learned to keep practicing when confronted with FOMO to avoid tunnel vision. All combined will lead you to effortlessly overcome FOMO and executing well thought out trades instead of knee-jerk reaction ones.
Summary: Overcome Day Trading FOMO
Use these 4 tips to overcome day trading FOMO in addition to the vast FREE resources we’ve made available on our website. Always remember that your day trading journey is not a race it’s a marathon. Financial freedom lives on the other side of discipline. Opportunities in the stock market present themselves daily so never feel as though you just missed the big one. My goal has always been to help as many day traders achieve their personal financial goals, whether they are novice traders or experienced traders.
The Maurice Kenny VIP Trading Program has helped over 600 people become financially free through one-on-one coaching, mentorship, and options trading strategy. Many of these new traders are now full-time traders, and they all started by watching his 1-hr webinar.
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