If there’s one common mental pitfall from the markets that I feel like I’ve really nailed down, it’s dealing with FOMO (fear of missing out). I’m at the point where I can miss plays over and over again, and I know I’ll be okay and it won’t wear on me. How did I get here? By simply missing countless plays, over and over again. Most importantly, I just realized over time that these plays, setups, and patterns happen so often. After missing a million and one plays, you just get to say to yourself, “okay, there will be another.”
I get it, it’s a common scenario. After stalking that stock setup for weeks or months, then you step away from your computer for a day and of course, miss it…that’s it, that’s the big test. We don’t despair, and we certainly don’t chase. You must just shrug and know deep down that there will truly be other opportunities, and you must know that they are everywhere! No matter what the market does, up, down, or choppy chaos, there will always be plays for us.
It’s all about keeping your head (yeah, but isn’t it always?). Keeping your mind strong and in check for the next trade that will be right around the corner. Don’t waste your mental capital on something that slipped by. Another opportunity is guaranteed to come floating yet again. You must not live in the past, don’t dwell on “missing it”. You must realize and know deep within that you didn’t really miss anything. Experience was number one in combating this one for me. When I first started, really the first year or so, it was all about what others were doing. Looking over my shoulder. It was all about me looking at other traders, getting bogged down by junk on stocktwits and talking heads on TV. Always comparing myself to others, it always seemed like they were always winning.
Seeing the markets fly up after a big long drawn-out downturn, but you happen to be gone for the day. You come back to your desk, and you missed the first big overall market bounce! All those plays that you had on the back burner for weeks, all the plotting and scheming you did just to watch it take off without you. That’s where you pump the brakes and keep your wits. Is there a conservative approach? Can you wait for a bounce opportunity at a nice support level? What I’m saying is, maybe the play isn’t toast, maybe there could be a Plan B. Or maybe it doesn’t matter at all, trash it and look to the next one. Remember: there will be others. That’s the beautiful thing about the markets, it’s always moving and changing, always revealing new chances to get in on some fresh plays.
If you have problems with FOMO like I did, I implore you to purposefully sit yourself on the sidelines for a week or even a month. Purposefully miss it. I guarantee you two things: one, you will survive it, and two, there will be countless opportunities after you missed all the previous. It took a couple of times, but it finally took. I could clearly see after experiencing it that these trades will come and they will go. Trends happen, with or without you. Before you were even born, the markets were here and moving around without you, and when you are gone, they will do the same.
One book that helped me see this clearly was O’neil’s “How to Make Money in Stocks”. Through examples in the first 100 pages, he demonstrated how the same plays and patterns occur repeatedly. He provides 100+ year old stock charts to prove it. Fear and greed are as old as mankind, and my takeaway was that these patterns will continue to repeat themselves. You just have to be patient and wait, and have the experience to recognize the patterns. I never feel like I’m missing anything because there will be either a secondary opportunity or another cycle in the markets to catch later. It’s just a matter of patience and waiting it out.
Patience pays off over time. Don’t fall into the FOMO trap, thinking that everyone else is getting rich but you. If you take your eye off the ball (you and your system/trading style/setups), you’ll lose control and be more likely to chase and make boneheaded plays. Work on your patience by immersing yourself in consciously allowing the trades and the market to go by without you, while still watching and tracking the markets. It’s torture but teaches the lessons you need to learn. If you miss a play, it’s okay because you know that the market will provide another opportunity to make money. It simply never stops moving.
Practice living in the now to curb FOMO for good. Focus on yourself, master your style, and the intricacies of your trading system. When you look at others or a super bullish market ploughing ahead without you, you may think “ahh I gotta get in on this!”. That is where you say, “No, I’ll catch the next train that comes by” because fear of missing out is 100% in your head. It’s up to you to get the screen time you need and understand that if you miss this play, another one will be waiting just for you.
