3 symptoms of crypto FOMO and how to avoid them
FOMO or Fear of Missing Out is not a new jargon to the cryptocurrency community. Crypto FOMO is such a psychological phenomenon that might drive crypto investors to disastrous decisions. So, how do you know whether or not you are suffering from cryptocurrency FOMO? Today Tokenize Xchange will help you point out 3 symptoms of crypto FOMO and 5 tips to deal with it.
In the Crypto market, when a cryptocurrency is on a short-term rally, the FOMO victim would get the urge to earn a “big profit” like other investors and immediately buy the digital coin without technical and fundamental analysis, this phenomenon can be called crypto FOMO.
Crypto FOMO DO exists and it would become a terrible drain on your financial situation as well as your mental health. Below are 3 crypto signs of cryptocurrency FOMO to help you identify it.
3 symptoms of Cryptocurrency FOMO
1. Obsession with price checking
You become obsessed with trading activities and cannot keep yourself from checking prices every 5 minutes.
2. High social media activity
Social media is the key factor that is able to trigger the fear of missing out. If you find yourself endlessly scrolling through your social media feed, looking for rumors and last-updated crypto news throughout the day, being anxious about the fear of missing a piece of information, then you may be suffering from FOMO in crypto trading.
3. Herd mentality
It is undeniable that the crowd has invisible power. You join a crypto investment community or group and might see many people investing in a certain digital coin with a rumor that it would be Lambo in the future. If you follow the crowd and decide to buy in without doing your own research, then you may get herd mentality bias. In other words, you are having FOMO.
Having FOMO might drive you to have biased behaviors, one of them is to take an increased risk without thorough consideration and much strategy. Instead of making fundamental analyses, traders with FOMO would decide to buy or sell crypto just by reading news or some rumors on the market or simply following a crowd.
FOMO is extremely dangerous for crypto investors since it may lead you to invest in ICO frauds and panic-selling when a digital asset drops. Investing should never be an emotional behavior, and if it is, you are doing it in the wrong way. Below are 5 tips to avoid crypto FOMO to help you out!
5 tips to avoid FOMO in trading crypto
1. Do your own research
Don’t blindly follow the crowd!
Instead, you should use their information as references only. As a logical trader, you’d better summarize information from the market news, your crypto investment community, and official channels of blockchain-based projects and real statistics to make your own decision.
Moreover, make sure you double-check any information that seems fishy since most traders are biased to their crypto portfolio and keep saying only the good things about the digital coins they are owning. Make your best effort to stay objective and keep an unbiased view when accessing any news sources.
Below is the checklist of 5 criteria to check before putting your money in any project:
- White paper
- Developer team
- Community activities
- The business position
- Total supply
>>>Read more: Top 5 crypto investment rules<<<
2. Watch out of scams
You don’t have to be an expert to realize that scammers are always taking advantage of crypto FOMO victims. Traders with FOMO are the favorite targets for scammers since they are too enthusiastic about crypto investment to pass up a bargain, even if the facts are totally unknown to them.
However, the majority of scam victims will fall for it again and again. When they realize that it is such a scam, unfortunately, it would be too late. Remember, if something looks too good to be true, then it is.
3. Overcome your behavior bias
No matter if you are aware of it or not, you might be impacted by some behavioral biases that can create your FOMO. Below are some common ones:
Confirmation bias: Many people intend to have more belief in the information that supports their opinion. To deal with confirmation bias, you should ask yourself critical questions to broaden your way of thinking. A good question would be “Why do I believe it?” or “What led me to believe it?”
According to researchers, many people are overconfident with their own investing skills. In fact, the cryptocurrency market is extremely volatile, as such, overconfidence can drive you to wrong decisions. To tackle this problem, you need to double-check every piece of information. And don’t believe it when some “expert” tells you that they can make a better return than the market.
4. Take a long-term view
For many cryptocurrency investors, investment is a long-term pursuit. Wealth is built over time, not overnight. Instead of chasing the latest craze, investors should focus on their financial plans and avoid making FOMO decisions.
The fact that survivor’s bias in the cryptocurrency market is very common. As such, the more you hear about failures, the less you get FOMO.
5. Learn from your mistakes
If you have FOMO and already took part in any crypto craze, then you should make the stop loss. To admit that you made a wrong decision helps you gain experience in the next trading.
FOMO is much more common than you think! Even veteran traders may sometimes suffer from FOMO. However, by recording your transaction history, you will have valuable data to analyze your failure and learn from them.
If you’ve finished this article finding out that you are having FOMO, then don’t be afraid, remember that you are not alone! Don’t hesitate to ask for help and keep following Tokenize Xchange for more crypto news and investment guide.
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