What is FOMO & FUD? How to avoid FOMO, FUD when investing cryptocurrencies

By Le Anh | Trade

What is Fomo

Certainly new brothers entered the market electronic money also heard at least once about 2 terms FOMO and FUD. But it is still not clear what these two terms mean in this cryptocurrency market.

In today's article, I will explain in a simple way for newcomers to enter the cryptocurrency market that can understand these two terms.

From concept, harm, to how to avoid being FOMO, FUD how to secure your assets in cryptocurrency trading.

OK, got it Are you ready? Let's get started!

FOMO stands for phrase Fear Of Missing Out. It shows the fear of missing out on the profits that can be made if you do not buy a cryptocurrency as soon as possible, regardless of its current price.

In the cryptocurrency market, the emotional factor used to facilitate transactions is more than justified. Therefore, FOMO is a factor that greatly influences the decision making process of cryptocurrency trading.

For example: Suppose you have no intention of entering any coin and are sitting surfing Telegram in Crypto investing communities. Suddenly, you realize that many groups are discussing the cooperation between a large company and project A and will likely increase sharply.

At this point, you check the price of token A and you see that token A increases continuously and increases very fast. Right now, you will feel that if you do not buy token A, you will miss the opportunity to make a profit.

After that, the brothers decided to buy token A regardless of how much the previous price had increased.

Thus, it can be said that the brothers had been FOMO.

What is FUD?

FUD stands for 3 words Fear, Uncertainty, Doubt. It refers to the fear, doubts, and uncertainties about bad information released from unknown sources of a cryptocurrency (usually Bitcoin).

Traders tend to sell off the FUD regardless of its current price, causing the Panic Sell effect to cause the value of the coin to drop significantly in a short time.

For example: You have entered an order to buy token A and are waiting to raise prices to sell. A few days later, all of a sudden, you see the news that the A coin will be delisted (removed) from the trading floor with evidence that a fake photo will make you bewildered.

Immediately, brothers checking in many other Telegram communities still find this news much discussed.

At this point, you will easily be in a state of fear if the token A is actually delist, the probability of you losing money is very high. At that time, the psychology of brothers and sisters only focused on preserving their assets and selling off token A with the least possible loss.

And many people think that, when the demand is not high, the price will drop much compared to the level before FUD.

Correlation between FOMO and FUD

In fact, FOMO and FUD are very powerful tools that are applied by influential organizations and individuals in the cryptocurrency market to serve their own interests.

Usually organizations that create FOMO or FUD will take control or have a great influence on many major media channels. From there they can influence as many traders as possible.

While FOMO is used as a tool to push the price of cryptocurrencies higher with the purpose of creating liquidity to BURNS. FUD is a tool used to manipulate the price of cryptocurrencies with the purpose GOM IN as much as possible before activating FOMO to take profits.

Consequences are caused by FOMO and FUD

Traders with little experience in the market will be susceptible to these two effects and the most obvious consequence is that their assets diminish after each FOMO or FUD.

But, the bigger consequence is that traders no longer believe in their decisions and decisions when entering the order because they had suffered a lot of losses because of FOMO and FUD.

And once a trader no longer believes his or her judgment, the trader's assets are likely to return to zero.

How to avoid being FOMO and FUD

Before getting to the main point, let's see if we are in the list or are affected by FOMO and FUD on the transaction decision!

Normally, brothers who are suffering from FOMO & FUD will be less experienced traders in the market and will have signs such as:

  • Impatient while trading.
  • There is no trading plan before entering the order.
  • Trade on news but don't update the market fast enough.
  • The analytical techniques are not yet rigid, leading to easy volatility of the view.

If you have any of these signs, you can refer to some ways to avoid FOMO and FUD below:

  • Updating real trading knowledge will definitely help you to be more consistent with your assessment and analysis.
  • Always have a trading plan before entering the order. There must be stoploss stop loss, entry order entry point, target selling point, how much capital allocation plan ... before trading.
  • Be really patient, consistent with your trading plan. Not hasty, impatient to enter the order.
  • Restrict transactions according to news and events. At the same time, practice observing the market closely to get market sensitivity.

Epilogue

On the negative side, FOMO and FUD have great consequences for those who suffer, along with a decrease in the number of assets through each FOMO & FUD.

But, if you look at the positive side, FOMO and FUD can still help you earn profits when and only if you are calm enough, brave enough to take advantage of opportunities. Because the financial game is essentially a zero game. That is when a person loses money there will be a person making a profit in this market.

Important who will you be? Lose money or earn money?

Hopefully, through this article, the new brothers will have more information and knowledge for themselves in this cryptocurrency market.

And if you see the information by yourself and the team Coin98 The offer is helpful. Do not forget to share this article with other brothers to read it!

Hello and see you again in the upcoming article!

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