At relates to trading, the fear of missing out (FOMO) is the feeling of anxiety caused by the inability to act on a stock or trend. FOMO appears when you see a stock move quickly beyond the price where you’d hoped to get in, and the inability to act is the paralysis caused by the fear of losing if you entered the trade. You bang your head against the wall when you see your favorite stock skyrocket without you, compounded by the fact that you hesitated to get in at a cheaper price. FOMO is an ugly feeling, but it can be a positive thing if it leads to good trading. Instead of agonizing over imaginary gains, use FOMO to enhance your focus as a trader.
Instead of chasing a stock blindly, simply wait for it to give you a better opportunity to jump in (even if the price is rising). The price of a stock always goes in three directions: Up, down and sideways. You can wait for the stock to form a level of support and buy while it’s in a sidesways channel. For the more experienced traders, you can wait for the stock to drop and buy the dip. For the more advanced traders, you can buy while the stock is rising based on the momentum (using volume as a guide).
Whatever strategy you use to get in a stock that’s trending, give yourself the opportunity to buy (or sell) when the risk is least. A stock that rises 100% could give a lot more, especially in a trending market. Be patient and wait for the opportunities to present itself.
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