What is FOMO and FUD? 04 Tips to avoid psychological syndromes when investing in Crypto

Market participants have also heard the terms FOMO and FUB but have not yet understood the meaning in the market. The following article will help you know the two words, their harm, and how to avoid FOMO and FUD to secure your assets in cryptocurrency trading.

Are FOMO and FUD only negative?

What is FOMO?

FOMO is an acronym for Fear Of Missing Out, representing the fear of missing out on profits that can be earned if you don’t buy a specific cryptocurrency as soon as possible, regardless of the price. How much is it currently?

In the Crypto market, emotions are used to drive transactions more than rationality, so FOMO is a factor that significantly influences the decision-making process of cryptocurrency trading.

What is FUD?

FUD is an acronym for Fear, Uncertainty, Doubt, which refers to fear, doubt, and uncertainty about lousy information being spread from unknown sources of a particular cryptocurrency (usually Bitcoin). ).

Traders tend to sell off FUD coins regardless of their current price, causing a Panic Sell effect that causes the value of that coin to drop a lot quicker.

Looking at the negative side, FOMO and FUD create significant consequences for market participants and decrease the number of assets through each FOMO or FUD.

However, if you look at the positive side, FOMO and FUD can still help you make a profit if you are calm enough and brave enough to take advantage of the opportunity.

Who will cause FOMO & FUD?

FOMO and FUD are very harmful tools applied by influential organizations and individuals in the cryptocurrency market to serve their interests.

Often the organizations that create FOMO or FUD will have control or significant influence over many effective media channels, from which they can influence as many traders as possible.

FOMO is used to push the price of a cryptocurrency up to create liquidity to take profits.

FUD is a tool used to sink the price of a cryptocurrency to go IN as much of that cryptocurrency as possible before activating FOMO to take profits.

Consequence

The first and most visible consequence is the gradual loss of assets to zero because people with this syndrome no longer trust their judgment and investment decisions.

In a worse case, they may even be scammed by intentional FUD or FOMO information, and then they will buy or sell strongly, causing us to fall into a “swinging peak”.

04 ways to overcome FOMO and FUD psychology when investing

New entrants to the market who want to avoid such situations can refer to the following tips:

• Updating actual trading knowledge will help you be more consistent with your analysis and evaluation.
• Always have a trading plan before entering an order. Before trading, there must be a stop loss, entry point, target sell point, how much capital allocation plan, etc.
• You have to be patient and consistent with your trading plan. Do not rush, impatient to enter the order.
• Limit transactions according to news and events. At the same time, practice observing the market closely to have market sensitivity.

FOMO and FUD are unlikely to disappear from everyone, no matter how experienced they are. Because we not only invest but also have a life outside.

For example, if an investor encounters an unfortunate incident in real life while preparing to enter an order, it will cause our psychology to be disturbed immediately. At this point, if you are not alert, entering and exiting orders is simply a game of chance.

So the above tips can only significantly reduce the damage caused by FOMO or FUD but cannot completely stop it.

I hope the article is helpful to you. Please add your comments to improve the paper.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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