FOMO
FOMO means “fear of missing out.” In investing, it is the pressure to buy quickly because other people seem to be making money.
Why this matters
FOMO can push you to buy after big price jumps, when risk is often higher. It can also make you ignore your plan and position size rules.
Simple example
A coin rises 40% in a week. You buy only because social media says it is “going to the moon.” A week later, it drops 25% and you panic sell.
Common mistakes
- Buying without a defined entry rule or risk limit.
- Increasing position size after a big move just because price is rising.
- Confusing short-term hype with long-term investment thesis.