FOMO: Tradings and Emotions

Like every other known business out there that involves a form of currency, forex trading has its risks. In trading, it is feasible to lose huge sums if the market turns against you, this turn of events is what would also make you win trades. The different types of risks involved in the buying and selling of currencies around the world should open up the minds of traders to the possibility of losses and sometimes wins in currency and foreign exchange swaps. It has been discovered that most of the time, traders take uncalculated risks ad a result of an imbalance in their emotions.

The fear of missing out on a win has led a lot of people to make trades that turned out a loss. Often times, the idea of leveraging with a small investment to have access to solid trades in foreign currency could result in a loss. In the case of a little fluctuation in the price, the trader may have to pay a margin in addition. During this process, if the market condition turns out volatile this leveraging could result in real losses of the initial investment. The difference in time zones or locations where exchange occurs could also result in losses.

The human mind constantly deals with two emotions; Fear and Greed. An average forex trader battles these emotions steadily as failure and losses aren't what we want to get used to. It is very important for a trader to know that one's state of mind can significantly affect their decisions. Traders must learn to maintain a calm disposition, especially as beginners to maintain consistency in trading. Of all the skills required to be a successful forex trader, emotional intelligence tops the chart. It is simply the ability to manage and understand your emotions. Honing the realities of your emotions would help you make rational decisions when it comes to trading.

The fear of missing out is a fear that makes a trader invest because they feel they are missing out on an opportunity everybody else is gaining from. To think like a trader is to agree that fear and forex trading don't make a good pair. When you trade because you think you are missing out on something everyone else is benefiting from, you wouldn't be able to deal with it if it turns out a loss. An essential tool necessary to become a real player in the forex trading world is learning to let go because fearful actions would spur quitting after a loss.

The fear of missing out could also be linked to greed. For example, it is fine to stop trading after three consecutive wins. Your emotions would be over the top and would make you hop on the next trade feeling like an invincible super trader who would never lose and end up over-trading. Before embarking on any trade, it is important to ask yourself; “Am I doing this for the fear of missing out？”, if your answer is yes, you should exit the trade immediately. Gain mastery over your emotions to achieve long-term trading success.