FOMO and Trading: my challenge

A trader’s activity is a constant struggle with oneself. Viewed from another perspective, a continuous challenge to better understand oneself, to surpass one’s limits, and thus to grow personally.

So, after 23 years in this field, 9 of which as a professional, I finally managed to understand and put a name to a significant problem that was limiting my performance: FOMO.

What is FOMO 

“FOMO” is an acronym that stands for “Fear Of Missing Out.” It refers to the feeling of anxiety or concern when one thinks that others may be enjoying experiences or opportunities that they themselves are missing out on, generating a strong desire to participate in such events or obtain similar opportunities. 

The term FOMO was first introduced in 2004 and has become more widespread, especially with the advent of social media and digital culture.

How FOMO manifests in trading 

FOMO is a common feeling in trading and investments. It occurs when a trader or investor sees a profit opportunity and fears missing out if they don’t act immediately, even if they haven’t conducted a thorough analysis of the market or situation.

In trading, FOMO drives many traders to make irrational decisions, such as entering a position just because they see the price rising rapidly or staying in a position for an extended period even when signals indicate it’s time to exit.

This behavior can lead to significant losses and harm long-term trading strategies.

Where did this problem come from? 

Often, awareness of a problem, being able to recognize it, defining it, and giving it a name is already a significant part of the solution.

In philosophy, there is a principle in this regard called “You’re It,” which refers to this very situation: “If you are something, you don’t know it. If you know you are something, you aren’t it anymore.”

From this perspective, knowing that I had this problem has already significantly influenced its resolution.

However, every problem has a root, often different for each of us, as it is related to our personal experiences and belief systems.
In recent times, I have tried to delve into the root of this problem, which I identified as two of my specific “false” beliefs.
The term “belief” refers to an idea, opinion, or conviction that a person holds about something or someone.
Beliefs can be influenced by past experiences, the information one possesses, the opinions of others, culture, religion, and many other factors. 
They can be positive or negative and can have a significant impact on a person’s behavior and decisions. 
Beliefs are often limiting convictions inherited from one’s educational, cultural, and experiential background.

My wrong beliefs

Specifically, I realised that I had two completely erroneous beliefs:

1. I have little time available

I first limited myself through my personal perception of time.

I’ve always lived life at a rapid pace. This way of living, coupled with the feeling of time passing by, was causing me to accelerate all my processes, including decision-making. Results? A decline in the quality of each individual process.

In reality, it’s not true at all: I believe that each of us has a considerable amount of time, which we often use poorly. All it took for me was to pause, breathe, eliminate distractions, to understand that time is not a problem at all.

I have plenty of it, so I can wait for the right opportunity.

2. Opportunities should be seized when they arise. 

Another limiting belief was tied to the fleeting nature of each opportunity.

You know the classic proverb, “opportunities pass by only once”?

I think this proverb heavily influenced my decisions, sometimes positively but also negatively at times.

The reality I’m gradually discovering is that, while it’s true that an individual train passes by only once. We live within the largest existing station, where thousands of trains pass by daily, all different and all beautiful.

What I’m finding out is that an opportunity shouldn’t be seized just because it’s passing by. Instead because it’s the right moment for me to grasp it, because I’m ready to seize it.

This depends on many factors, not just the fact that the opportunity is passing before my eyes.

I’m even experimenting, with considerable satisfaction, with the opposite principle: when I am ready, the right opportunity comes before me, in line with the principle of attraction and the law of resonance, of which the world is full of concrete examples.

The same principle I mentioned earlier applies to beliefs, namely that awareness is already a big part of the solution.

Belief is a thought, and as such, it can be eliminated and replaced with non-limiting and empowering thoughts.

Here are my two new empowering beliefs that have replaced the previous ones:

1. I have all the time I desire
2. Every day, many opportunities pass by; I will seize one when I feel ready

Perspective and actions: how I managed to change my mindset

Changing my thinking was, therefore, very important, even though it was just the starting point.

A change in mindset, in my opinion, is useless without an action plan that confirms the paradigm shift and concretely helps in everyday life.

I began to change my perspective regarding my goals, often big, ambitious, and stimulating but equally often causing chronic and dangerous dissatisfaction.

I decided consciously and rationally not to want to miss any single detail of the present in the name of a better future.

Everything I have is wonderful and absolutely enough: my free time, my work, my family, the place where I live. Nothing is missing.

We often think about what we want more of and differently, undervaluing or not appreciating what we already have. And this is a risk I no longer want to take.

3 concrete actions to effectively free myself from the grip of FOMO

1. I expanded the time horizon

Typically, I measure my performance in small units of time: the day, the week, the month, and the season (9 months).

So, I’ve decided to continue measuring these performances as intermediate milestones within a longer-term project spanning three years.

Expanding the time horizon for my goals helps me slow down and not feel compelled to seize a particular opportunity.

Essentially, I’ve forced my brain to think that “I have plenty of time.”

2. I reduced financial needs

I’ve never been a big saver, as I’ve always been focused on maximizing revenue, income streams, and planned investments.

However, this created a growing desire and need to increase revenue. Therefore, the “obligation” to seize every opportunity that came my way

Recently, I discovered the world of optimization, cost containment, and reducing unnecessary expenses, which effectively reduced my financial needs, with a significant benefit to my mindset.

At first, I was concerned that less financial pressure would lessen my motivation, as the urgency to perform at my peak seemed reduced. But I discovered the ideal motivation here as well. I strive for improvement, growth, and peak performance to fulfill my desire to become increasingly proficient in my work.

So, profit became a consequence of being good, rather than a stimulus driven by necessity—a profound paradigm shift.

3. I refined the selection criteria

How many opportunities are perceived as such without actually being so?

This is the thought that guided the process of refining the criteria for selecting my moves. It also helped me perceive events that did not align with it as “non-opportunities.”

The risk was having broad selection criteria, relying on my ability to assess individual decisions, and thus having ample opportunities to perceive a missed selection as a lost opportunity.

Today, if an event doesn’t fit these criteria, it’s perceived as “not meeting the criteria,” a motivation that is certainly better and less compromising to my mindset than the feeling of having missed an opportunity.

In conclusion: two new empowering conditions, one new perspective, and three new actions. From here begins my challenge to overcome this treacherous issue. It was risking to undermine my results and destabilize the precious psychological balance. Balance which every trader must cherish as the most valuable asset.