Tell me if this sounds familiar…
You see a stock breaking out…making new high virtually every minute without a downtick…
After staring at it for about 5-10 minutes…you’ve reached peak FOMO and decide to jump in…
Only to have it reverse direction the second you buy it.
You’re left scrambling to exit the trade to minimize losses.
Or even worse, you hold it hoping it goes back up so you can at least break-even on it.
Seeing a stock go up 949% like Motorsport Games Inc. (NASDAQ: MSGM) yesterday can make even the most disciplined traders experience a serious case of FOMO.
Today I’ll share what those problems could mean for you. But I’ll also give you tips on how to manage FOMO so you can avoid a situation like I just described…
Problems FOMO Creates
FOMO is the emotion of fear of missing out. Simply feeling it doesn’t cause traders any problems — if you can stay disciplined and ignore it.
But if you act on it and chase entries … Or reenter stocks after taking a profit and trying to squeeze more out of it…
- You’re left with a frustrating and avoidable loss that hurts your account and your mentality.
- You’ve destroyed your confidence and ability to recognize and execute good trade ideas.
- Or you’re bag-holding a loser which only takes your attention and capital away from other more potentially lucrative trades.
The good news is, you can avoid all those problems when you tame FOMO.
So you can keep your mind clear and ready for the next opportunity…
How to Overcome FOMO
How can you avoid thoughts, feelings, and urges that will only hurt you in the end?
First, if you sat on your hands and watched a big runner like MSGM — give yourself a pat on the back.
Being able to avoid entering because you don’t see a trade shows great discipline.
And sitting back and watching big runners isn’t a complete waste of time…
When you watch a stock move without your brain clouded with FOMO and dreams of profits — you can use it as a learning experience.
These big runners don’t come around every day.
So watch and practice reading price action and get prepared for the next one. See if you can spot good entries and exits without putting any money on the line.
Second, if you took a trade but sold too soon, it’s a great chance to review your trade…
Go over your entire trade plan. Your entry, exit, risk-to-reward, and execution. Did you follow your plan? Did you have a good risk to reward of at least 2:1 or 3:1?
If you had a trading plan like I laid out in my Daily Market Profit alert, and you followed it — that’s a good trade.
You have no reason to have FOMO. You don’t need to re-enter and try to make more.
Use the experience to see if you can make adjustments for your next trade…
Maybe you take a smaller size so you can hold it longer. Or scale out of trades so you lock in profits but also hold some of your position and be more patient. (While still having a risk level, of course.)
And lastly, one of the best ways to overcome FOMO and avoid chasing stocks is to talk to yourself the way you’d talk to a friend.
You wouldn’t call your friend an idiot and tell them to chase a stock that’s up over 500%.
You’d congratulate them on a well-executed plan. Or you’d say in the words of your mentor (that’s me), “there will always be another one…”
We’ll be ready to spot and execute a trade on the next big runner in the SteadyTrade Team. Will you be there?
If you can’t commit to the time it takes, consider signing up for my Daily Market Profit alerts…
I gave traders a trading plan in TC Biopharm (Holdings) Plc (NASDAQ: TCBP) on Thursday with a signal price of $5 — it hit $7 in premarket the next morning.
On Friday I alerted BuzzFeed, Inc. (NASDAQ: BZFD) with a signal price of $3. It hit a high of $4.25.
On Monday my alert was Genius Group Limited (NYSE: GNS) with a signal price of $6. It hit $7.20.
And yesterday was MSGM with a signal entry at $8.50 — it hit a high of $27.60!
Lead Trainer, StocksToTrade