FOMO is the English abbreviation for Fear of Missing Out, which we can translate as fear of being omitted. It is a syndrome affecting mostly young people. It reveals itself to the fear that being cut off from the Internet, without following the channels on social media, we will miss something irrelevant. How is this psychological phenomenon to invest in cryptocurrencies?
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FOMO affecting the cryptocurrency investor
You have decided to buy a token for a project. You have read about this project and you have a great opinion about it. With the investment in it you are hoping for a big income. You log in to the stock exchange and send your funds. At this point, you notice that there are two green 5 minute candles. You think, the price is rising, and you only want to buy it. You have burned on this project and you can not miss its height. You want to be in this "train" going to the top of the chart. After all, this token is so good. You quickly buy this cryptocurrency with the Market option. You do not issue a pending Limit buy order, because you are afraid that you will miss increases and second chance will not be anymore. In this case, you got a FOMO, burning in emotions and buying a given project, instead wait for a slightly lower price.
Another example. You learn from your friends about some cryptographic. In two months it will have some important events. There are some rumors that can affect the price increase. Colleagues have already bought his tokens and praising the project, they say that it has not been so good for a long time. Without knowing details, without even knowing what a cryptocurrency you are, you buy it quickly you are afraid that its increases will forever pass you by. Others will also discover this great project and it will be much more expensive, and the current price will never come back, like bitcoin, when nobody knew about it and you could buy it for a few cents. In this case also FOMO worked, which your colleagues did to you.
The last example, although you can multiply them for a long time. The price of a given token grows, and you do not buy it, because you think it will fall soon. Meanwhile, the price is still growing. You feel with what once worse, because you do not have this token, and you could buy it when it was much cheaper. You are almost buying, but you are waiting for a correction. Correction does not come. Emotions are getting bigger and bigger. Everyone starts yelling that this one token is a new revelation and soon there will be another 5 times more expensive. You see vertical increases in the chart, but eventually you buybecause you have not dealt with FOMO, i.e. with the feeling that increases are bypassed.
strongest FOMO often comes when a given item should be soldrather than buy. At the local summit or after the bubble growth. It leads to hasty and emotional, ill-considered investment decisions, most often resulting in a loss.