What is FOMO? The Psychology of the Fear of Missing Out Every Trader Needs to Know

Over the years TrustFinance has been in the trading industry, we've seen countless recurring stories from many traders. From those with solid systems and deep knowledge to beginners, everyone has experienced the same thing:  FOMO, or Fear of Missing Out, the fear of missing out on profit opportunities that has led many portfolios to an unexpected end.

We once saw a trader lose over 500,000 Baht in less than two weeks simply because they saw friends in their trading group posting consecutive profits. They rushed to open an order without a plan, hoping only "not to miss out like others." But the market immediately reversed. What happened wasn't due to a chart error, but from an emotion called FOMO, the silent enemy that harms traders the most in the market.

And this is what we want to share from what TrustFinance has seen, learned, and observed from countless traders worldwide, so you can understand what FOMO is, why it's dangerous, and how to live with it knowingly. Because this is one of the 7 Trading Psychologies That Will Help You Survive the Market

What is FOMO in Trading?

FOMO is a psychological state that occurs when traders feel they are "missing out" while others are profiting from the market. Images of friends in groups posting tens of thousands in positive portfolios, strong chart movement alerts, or guru posts showing trading results all stimulate our brains. The body releases Cortisol, a stress hormone, and often, it leads us to impulsive decisions.

Many traders fall into FOMO unknowingly. For example, seeing gold prices surge, they rush to open a Buy order even when it's near resistance, or seeing friends profit from crypto trading, they quickly jump in without research. It's a very fast-acting emotion. We know we shouldn't, but we're "afraid of missing out" and can't stop ourselves.

Causes of FOMO in Trading

From observing traders worldwide, we've found that FOMO typically stems from three main causes:

1. Excessive comparison with others
This era is full of posts showing profits and green portfolios, but no one tells you how many mistakes they went through to get there. Seeing only the good side of others makes us feel like we're "falling behind" and want to catch up quickly.

2. Desire to get rich too quickly
Many enter the market with a goal of 100% monthly profit, influenced by advertisements or others' claims. This creates an unrealistic drive, and this very expectation becomes the fuel for FOMO to grow.

3. Lack of a clear trading plan
Traders without a system often trade based on emotion rather than data. When they see a chart move or a signal appear, they rush in without assessing the risk. This type of trading often ends in losses and accumulated stress.

Impact of FOMO on Trading

FOMO doesn't just lead to wrong decisions; it causes us to lose "discipline," which is the core of trading. From data we've collected from traders in the TrustFinance community, over 85% of trades driven by FOMO result in losses, as traders often enter the market at the end of a wave, buy high, sell low, and open too many orders.

And what most often follows FOMO is Revenge Trade. What is it? Stop revenge trading before your portfolio crashes. Because when losses occur due to fear of missing out, traders often get angry at themselves and want to "get back at the market," leading them to open larger positions without analysis. The result is an even heavier loss to the portfolio.

We've seen many whose portfolios vanished by 30% in a single day from chasing the market like this, all starting from a split-second emotion called FOMO.

Effective Ways to Control FOMO

After seeing many recurring cases, we've found that managing FOMO isn't as difficult as it seems; it simply requires a clear mindset and discipline.

1. Have a Clear Trading Plan
Plan every day: "Which pair to trade, where is the entry point, how much risk?" And never trade outside the plan, because unplanned opportunities are often traps that trick us into believing, "This is the golden moment."

2. Keep a Consistent Trading Journal
We recommend reading Unlock Profits! 5 Secret Strategies for Keeping a Trading Journal Like the Top 1% of Traders because journaling is a mirror that honestly reflects our habits. You'll start to see when you tend to experience FOMO and can plan to avoid it.

3. Set a Daily Loss Limit
A simple rule that saves many traders is: "If today's losses reach the set limit, stop immediately," no matter how good the signals seem. This concept is one of the principles we've explained in How to Trade Forex Without Blowing Your Account, which helps traders survive in the market longer than expected.

Building Habits to Counter FOMO

FOMO will always be with us, but we can weaken it with "habits" that strengthen mental stability. Many traders we've spoken with often share a common trait: they always take care of their mental well-being before trading, such as meditating for 10 minutes in the morning, writing daily goals, or exercising before opening charts.

Some say that reading 7 Daily Habits That Transform You Into a Professional Trader helped them establish a more stable routine. When life has discipline, trading follows suit.

Another thing we've seen work effectively is "reducing consumption of emotional trading media," such as groups boasting profits or posting buy/sell signals, as these are prime breeding grounds for FOMO. Focusing on your own plan rather than comparing yourself to others is a way to calm your mind and trade mindfully in the long run.

Conclusion

FOMO is a lesson every trader must face, and no one can escape it all the time. The important thing is to "live with it knowingly" rather than trying to flee or deny it.

The market will open every day; opportunities will always be there. But what allows traders to survive isn't catching every single move, but rather "the ability to wait for the right moment" with a clear plan and an unwavering mind.

TrustFinance wants everyone to remember that the fear of missing out is not an enemy if we understand it well enough. Because when we control our emotions, we control our portfolio, and when we control our portfolio, trading stability begins right there.

Frequently Asked Questions (FAQ)

1. What is FOMO in trading?
FOMO, or Fear of Missing Out, is the emotion of fearing to miss out on profit opportunities, leading traders to rush into orders without following their plan, often resulting in losses.

2. How does FOMO occur?
It often arises from seeing others profit, observing strong chart movements, or reading social media posts, which triggers an immediate desire to trade without analysis.

3. How do you know if you're experiencing FOMO?
You can observe it through feelings of "fear of missing out," "wanting to enter now," or "a racing heart when seeing the market move." If you have these emotions, FOMO is likely controlling you.

4. How can FOMO be managed?
Have a clear trading plan, keep a Trading Journal, and set a Daily Loss Limit to stop yourself before emotions take over.

5. Can FOMO be completely cured?
It cannot be completely cured, but it can be controlled with mindfulness and discipline. Accepting that "missing an opportunity" is better than "losing your portfolio" is a skill every professional trader must practice.

Sources

1. Investopedia – Trading Psychology: What It Is and Why It Matters
   Provides foundational knowledge on trading psychology and approaches to managing emotions in financial markets.
2. DailyFX – How to Manage FOMO When Trading the Markets
   Reference article from a global analysis team, explaining FOMO behavior and its impact on trading decisions.
3. Bloomberg – Fear of Missing Out Drives Retail Traders Back Into Markets
   A report from a leading economic news agency, discussing the FOMO trend among retail investors worldwide.
4. Psychology Today – The Science Behind Fear of Missing Out (FOMO)
   Psychological research explaining the brain and emotional mechanisms that cause FOMO in investors.
5. Harvard Business Review – Managing Emotions in Financial Decision Making
   An article from Harvard focusing on emotional management and conscious financial decision-making.