What is FOMO (Fear of Missing Out)?
FOMO in trading is the anxiety-driven impulse to enter a trade because a stock is moving aggressively and you fear missing the profit opportunity, regardless of whether it fits your strategy.
FOMO (Fear of Missing Out) Explained
FOMO typically strikes when you see a stock rocketing upward on social media or watch lists. The pain of watching others profit while you sit on the sidelines can be psychologically unbearable. FOMO-driven entries are almost always at the worst possible prices — near the top of a move. The antidote is trusting your trading plan and understanding that there will always be another opportunity.
Real-World Example
A stock you've been watching jumps 15% in an hour. You didn't have an entry signal, but the fear of missing out pushes you to buy at the top. The stock reverses within 30 minutes and you're immediately down 4%. Had you followed your plan, you would have waited for a pullback.
Related Terms
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