FOMO - The most dangerous feeling for trading

This topic occupies many people in the market, why do we suddenly feel a strong desire to buy as soon as prices rise? Although the opposite is supposed to happen and The truth is that emotions play a major role in our financial decisions, and fear and greed are what rule the whole scene.

When prices start to rise rapidly, we feel that we must seize the opportunity before it's too late. We see others winning, and we fear that we are the only ones out of the game. This feeling is called FOMO or "fear of missing out" and it is one of the most dangerous feelings that can make you make hasty decisions without thinking about the risks.

On the contrary, when prices fall, instead of seeing it as an opportunity to buy at a lower price, we find ourselves more afraid and stay away from the market, although it is logical to buy when prices are cheap and sell when they are expensive. Unfortunately the market does not go by logic, it goes by emotions. Greed sometimes makes us run after a high price hoping that it will continue to rise but suddenly a correction may occur, and we find ourselves buying at the top and getting attached.

Therefore, we must be smart and think rationally before making any decision. Before you buy, ask yourself: Am I in because I am convinced of the opportunity, or just because the market is flying and everyone is talking about it? Do I have a clear exit plan or am I in it emotionally? The market is full of opportunities all the time, and the smart person is the one who knows when to enter and when to exit without being controlled by fear and greed.

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