FOMO (Fear of Missing Out)

FOMO in trading refers to the emotional response that causes traders to enter positions hastily for fear of missing potential profits. This psychological phenomenon often leads to buying at market tops or chasing momentum without proper analysis. FOMO can cause traders to abandon their trading plans, ignore risk management rules, and make impulsive decisions based on emotion rather than logic. It's particularly common during strong bull runs or when seeing others profit from trades. Overcoming FOMO requires discipline, a solid trading plan, and the understanding that there will always be new opportunities.