1. FOMO – When emotions lead instead of strategy
During strong growth phases in the cryptocurrency market, the phenomenon of FOMO (Fear of Missing Out) – the fear of missing an opportunity – often appears frequently. This mentality leads many investors to act in crowds, ignoring analysis, strategy, and risk management just because... 'everyone seems to be making money.'
FOMO manifests through behaviors:
Rushing into trades after the price has risen sharply.
Ignoring placing stop-losses because believing the price 'will continue to rise'.
Trading based on rumors instead of technical analysis.
Investing a large amount of capital because of the fear of 'missing a life-changing opportunity'.
The danger is: FOMO often peaks just before the market reverses.
2. Euphoric market: When everyone is winning – is when you need to be the most alert
In hot growth phases, many assets increase by dozens, even hundreds of percent in just a few days. The community becomes excited, keywords like 'all in', 'crazy', 'already doubled but haven’t sold' appear frequently on social media.
But history shows:
When the general mentality is 'buying out of fear of missing out', the sharks often have quietly exited.
When 'everyone is making money', the market has entered the distribution phase.
3. Trading principles for investors during euphoric phases
1. Always have a plan before entering a trade
Clearly define: entry point, stop-loss point, take-profit point.
Do not enter a trade just because 'the price is rising sharply'.
2. Trade with reasonable volume
Divide your capital into several parts, do not use all your assets for one trade.
In high-risk phases, only use 20-30% of trading capital.
3. Discipline with stop-loss
Cutting losses quickly when wrong is the only way to survive long term.
Do not 'hold hope' with a position that has deep losses.
4. Prioritize technical analysis over news
The regular price already reflects good news before the news is announced.
Focus on support – resistance areas, RSI, volume confirmation, rather than temporary emotions.
5. Know when to stay out of the market
The market always has waves. Not trading can also be a strategy.
When you feel 'missing out is a pity', that is often a signal you should... take a break.
4. Conclusion
The FOMO mentality is an inevitable part of financial markets, especially in crypto – where volatility is extremely fast and profit expectations are extremely high. However, the winner is not the one who enters the earliest, but the one who maintains discipline and a cool head the longest.
Do not get swept up in the crowd. Be a trader with a strategy.
Are you going through a FOMO phase or maintaining discipline? Share your views with the Binance Square community!