As we enter the first trading day of 2025, we have a lot of setups going on…
It’s fantastic and I can’t wait to get this year started!
That said, as the markets heat up, there’s a challenge rearing its head for many traders—something that can trip up even the most experienced among us.
I’m talking about the fear of missing out, or FOMO.
It’s a mental trap that sneaks in when emotions start overriding your strategy.
You probably know what I mean. I know I’ve experienced it myself in my many years of trading…
You’re scrolling through social media, and you see other traders posting about their massive gains. Suddenly, you feel like you’re falling behind.
You find yourself thinking, “If only I had made that trade, I’d have those gains too…”
Unfortunately, this mindset is a disaster waiting to happen.
FOMO will have you chasing late entries, diving into poorly-researched plays, and trading without a solid plan.
And then you end up holding the bag, or worse, blowing up your account.
But you don’t have to let this happen.
Table of Contents
What Causes FOMO?
A few key psychological factors trigger FOMO. In fact, so much in trading is related to psychology…
Recognizing these triggers is the first step to shutting down FOMO.
Social Validation:
This is the need to fit in or gain approval from others.
Seeing traders online brag about their “big wins” can make you feel left out or inferior. That’s when the temptation to chase starts creeping in.
Loss Aversion:
This happens when the fear of missing out feels like a loss—even though you weren’t even going to make the trade in the first place.
The craziest thing is that it can trick you into entering the trade after all, just to avoid “losing.”
Overconfidence:
A few wins under your belt can give you a false sense of invincibility. Suddenly, you’re trading setups that don’t match your strategy, overtrading, or even revenge trading.
Remember—the market is a humbling teacher. It doesn’t care one bit about how great a trader you think you are.
The Role of Social Media and News
Social media and news outlets can worsen FOMO.
On platforms like X or Reddit, traders love showing off their wins, complete with photos of their big boats, expensive bottles of wine, vacation homes, etc…
Interestingly, they rarely share their losses or the risks they’ve taken to get there.
Those are conveniently left out.
Coincidence? I think not.
News headlines don’t help either.
Hyperbolic headlines like, “Stock XYZ just made 500% in one day!” make you feel like you need to act immediately or you’ll miss out forever.
Just remember, headlines and social media hide a big part of the real picture.
Learn to ignore the noise and stick to your trade plan. Believe me, you’ll make smarter, more profitable decisions.
A Basic Rule to Avoid FOMO: Don’t Chase Bad Setups
It’s pretty simple: Only go after reliable setups with a high probability of success.
These are the kinds of patterns I teach my Daily Income Trader and StockstoTrade Advisory members to always look for.
It’s easy to say, but tough to stick to, especially when emotions run high.
If social media is buzzing about a stock that’s already gone nuts, avoid it like the plague. If you enter that trade, that’s classic chasing, and it’s a surefire way to lose.
Avoid chasing every shiny thing, and you’ll avoid FOMO.
My Final Thoughts…
By understanding the psychology behind FOMO, shutting out the noise, and sticking to your strategy, you’ll trade with more confidence and fewer mistakes.
Even better, you’ll still be here to trade another day and eventually go after bigger and more exciting opportunities as your capital grows.
Keep your head in the game, stay disciplined, and remember—there’s always another opportunity just around the corner…
Especially now!
To learn more about trading smarter and avoiding FOMO, join our StocksToTrade community.
We have tons of free live webinars.
They run all day and offer trading tips and tricks, info on our Oracle trading system, and other valuable training.
And for additional trading mentorship, stock ideas, and more, subscribe to my StocksToTrade Advisory service.
Every STT Advisory member gets a monthly newsletter with a list of my top picks, three weekly videos with my watchlists, bonus reports, and more.
Sign up for StocksToTrade Advisory right here!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade