September 28

What You Need To Know About FOMO

By Yvan

All You Need To Know About FOMO

You’ve undoubtedly experienced the fear of missing out before – dubbed FOMO.

But really, what is FOMO; what are its physical and psychological implications? And how can you free yourself from it and, by the same token, improve your trading performance?

To answer this question, we must first look at what emotions are.

In truth, scientists have a hard time reaching any kind of consensus. But most experts in the matter agree on three things:

1. The middle layer of the brain, called the “Midbrain”, is where emotions originate.

2. A complex series of physical changes throughout the body is at the core of any emotion.

3. These physical changes condition/prepare us to take action.


Physical changes in the body include changes in heart rate, hormone levels, blood pressure and circulation, muscle tone, as well as the activation of different parts of the nervous system.

In our subjective experience, we notice these changes in different manners – “butterflies” at the level of the stomach, a “lump” in the throat, shaky hands and knees…

We also notice them as urges to act in a particular way – cry, laugh, hide, fight, and so on.

Under the influence of FOMO

Emotions tend to have us act in different ways. For instance, when you’re under the influence of FOMO, you commonly tend to override your trading plan — making changes to your trades, increasing your risk, entering before you get a signal, not getting out when your price target is reached. And so on.

But notice the keyword I used here: tend.

A tendency means that we are I N C L I N E D to do something; but it doesn’t mean we H A V E to do it. It doesn’t mean we have no choice.

It’s very important that you understand this…

Let’s say, you’re anxious about missing out, you will certainly have the tendency to do certain things that you wouldn’t do normally. But no matter how hard-hitting the emotions are, you can choose to act differently – in accordance with your plan and your longer-term objectives.

The experience of FOMO certainly varies from person to person (as does any emotion), but it may include some of the following:

➤ Physical changes – blood pressure, heart rate, perspiration, breathing, etc…

➤ Sensations – racing heart, stomach churning, shaking legs, sweaty hands…

➤ Thoughts about what might go right, what might be missed, memories of when you missed an opportunity, etc…

➤ Uncontrollable **seemingly uncontrollable** urges to act in a particular way.

But no matter how strong these symptoms are for you, they certainly do not control your behavior. And here’s a simple example to illustrate why.

Have you ever felt angry but acted calmly?

I’m sure you have. Even though you felt like bursting out, you actually managed to speak slowly and calmly while maintaining a look of serenity on your face.

What prevented you from acting out your anger?

Try to recall…

The answer: Your will. Isn’t it?

It’s just that! You can find many other reasons but inherently, it’s all just that.

In other words, you had a tendency to act like an angry person (and be one), but you chose not to.

You can control your behavior

Here’s the point I’m trying to hammer home: Even though you can’t really control your emotions and the way you feel, you can directly control your behavior.

This realization has an important practical application for you as a trader because once understood, you’ll understand that it’s far more useful to focus on that which you can control rather than that which you can’t.

The idea that emotions control your actions is widely accepted as a fact and it’s a very powerful illusion. But it’s just that: an illusion. And it’s so anchored in our minds that it’s hard to believe otherwise.

Let’s get back to FOMO. When you’re in that state, just remember that even the best traders experience this.

They do and probably as often as you do!

But, the difference is that, consciously or unconsciously, they’ve somehow managed to develop a will that is as strong as, if not stronger than their urges.

That’s one.

Second, because they also know that their will is subject to changes (when it’s used too much it gets depleted temporarily), pro-traders set up a certain set of practices (or rules) that’ll take most of the hard decisions out of their hands, thereby protecting their emotional capital as much as possible.

And these are developed through repeated practice and positive feedbacks on mistakes.

They’re also the result of having understood very clearly (and through experience) that emotions, in a field like trading, are deceptive and following them will often lead to disastrous results.

In other words, a pro-trader is someone who has learned to do what needs to be done instead of doing what’s easy. He/ she is someone who doesn’t seek to do what’s easy in the moment to the detriment of his/her longer-term objectives.

It’s like going to the gym. It’s not easy but you still go. Because you want the damn results!



It seems as if emotions cause us to lose in the markets. But actually, it’s not true. We’re only acting this way because we’ve developed bad habits.

But if you can consciously bring your attention to how you’re feeling in the midst of FOMO, and if you can consciously observe how this is giving you the tendency to behave in a certain way, then no matter how intense the emotions are, you’ll still be able to control your actions.

And this, ladies and gentleman, is how you learn to transcend FOMO.

Share The Full Post

Take it Further with The Trading Psychology Mastery Course

"The course has impacted positively my trading by bringing awareness to my monkey mind habits during live trading. The awareness is impacting my life in general where I am making better choices. i would recommend it highly to every trader I know." ―Mandeep Gill