Fear of missing out, known as FOMO, is extremely problematic among people who are actively involved in cryptocurrency investments. FOMO is described as pervasive apprehension that makes you want to stay connected with what others are doing; it has been especially relevant since the rise of social networks. Quite a big percentage of both day-traders and long-term investors are struggling with fear that some hot and promising projects ( ICOs , new digital currencies etc.) will pass by before they see the opportunity and buy it low. Therefore, we tend to make more mistakes due to emotions and irrational thinking. Staying calm and thinking logically is really much easier said than done, but it for sure is the safest way to succeed in the long run.
So , here are several tips to overcome FOMO in the volatile and unpredictable cryptocurrency market:
ALWAYS DO A PROPER RESEARCH before buying the next trending coin/token. When you see the news for a potentially great offering and you feel the urge to get into, don’t skip the boring part of critical analysis- try to understand the concept, observe official website, go to discussion forums. Try to avoid confirmation bias and pay attention to negative statements, there might be some very well-grounded arguments against the project. This process takes at least several hours and the fact that it’s not exciting will actually do you a favour. You will calm down a little as the overwhelming feelings will be more or less replaced by rational thinking, which is necessary to summarize all the information you collected.
USE DOLLAR COST AVERAGING practice. It means buying regularly with a fixed amount of money, without studying the price movements and waiting for dips. This strategy is useful in highly volatile markets and cryptocurrency market is a perfect example. Note that advantages of DCA only apply to long-term holders who invest relatively big amounts of money. As an example, you could buy Ethereum with 200$ every week and just don’t spend lots of time on reading articles and studying charts with hope to predict future movements. Of course, this strategy has its disadvantages such as frequent transaction fees and not the biggest ROI possible. Still, if you aim to hold for a long time and avoid FOMO, this could be a solution.
TAKE A LOOK AT HISTORY OF MARKET BUBBLES, obviously starting from dot.com burst. You will find matching patterns with our current situation (especially ICOs) and high levels of risk, which may make you a bit skeptical about the projects. This directly hits FOMO and can be used as an effective tool.
GO HAVE A BEER and wait until your crypto-portfolio slowly goes to the moon.
Share your ways of dealing with FOMO!