Trading JOMO—what is it? Why Replacing FOMO with JOMO is your Rewarding Antidote?
In the last post, we explored the most renowned concept of trading FOMO (fear of missing out), including what it’s like to encounter it, the thoughts that lie behind that sensation of dread, how one becomes extremely vulnerable to it, and how to effectively overcome it for the sake of your trading career goodness.
However, a new, critically essential concept has emerged to help market participants avoid making hasty decisions out of fear of missing out (FOMO) and instead slow down, consider all of their possibilities and enjoy the ride, thus giving rise to JOMO.
JOMO: “Joy of Missing Out” is an initialism for this concept. The phrase “Joy of Missing Out” (JOMO) is occasionally used to characterize a feeling experienced when one is satisfied for the duration despite not engaging in a particularly hectic and sometimes stressful trading activity.
In other words, it describes the euphoric state one has after avoiding a disastrous deal and resulting losses. It’s a safe bet and will safeguard your life, too.
The Origin of JOMO!
It was a Psychologist by the name of Dr. Joe Pierre who first came up with the term JOMO—and it has since gained popularity among numerous businesses, including Forex Trading as well that use trading philosophy to keep traders’ delicate feelings under wraps under tumultuous market conditions.
It’s a trendy expression that counters the all-too-common case of “FOMO.”
FOMO may be seen as a contemporary manifestation of the age-old desire to “keep up with the Joneses.” For those suffering from (FOMO), it isn’t easy to concentrate on the current trading activities at hand since they’re too busy wondering what every other trader is up to.
You’ve undoubtedly seen the many manifestations of FOMO by now. Just observe the world as it is. As a whole, we can’t help but notice how absorbed in their phones everyone seems to be. They are worried that if they turn their attention off their screens for a moment, they will lose out on something important, whether it be a person or an opportunity.
Likewise, in Forex, traders have the debilitating FOMO on the next golden chance and the opportunity to increase one’s profits to a significant degree might slip from their hands. It’s a common justification for rushing into an uninformed and expensive financial decision.
Of course, the foreign exchange markets may be a cause of substantial degrees of distress and anguish for a great multitude of traders. There is always the concern that you will be unaware of the next wonderful thing or suffer a financial loss due to pricing fluctuations.
Contrast this outlook with JOMO. Investors use JOMO as a defence mechanism against the FOMO that might occur in the markets. Investors might experience JOMO when the worth of a currency they were considering investing in suddenly drops substantially. The point is to stop worrying about exchange rates and learn to enjoy life without worrying about wealth.
Having peace of mind in the face of increasing/decreasing costs is vital, as is the pleasure of not needing to constantly monitor market volatility.
Keep in mind that there is pleasure in passing up on an online trading opportunity the next time you feel overwhelmed by the temptation to succeed. Take it easy and savour the sense of achievement that comes from knowing you are not directly engaged in the highs and lows.
In this post, we learn about why enabling the marketplace to find you and acting on your own JOMO is usually a better approach than enabling FOMO to dictate your actions.
Drop your FOMO and pick up your JOMO.
As we have discussed, traders might experience FOMO if they don’t take the edge of every possible trading opportunity. This might be due to concerns about being left behind in the market’s action, being unaware of breaking financial news, or feeling unprepared compared to other investors.
Thus, a trader suffering from FOMO will likely be nervous and discontent.
Several people have called JOMO the “emotionally savvy solution to FOMO.”
Positive emotions like JOMO in trading represent the serenity and self-control that are so valuable to those who engage in the profession. One who trades with JOMO is confident that they have sound judgment, follow a detailed trading plan and patiently wait for trading prospects consistent with their methodology.
In striking contrast, a trader suffering from FOMO always holds themselves back.
The distinction between FOMO and JOMO hinges on a single letter.
By rephrasing the negative emotion of worry with a positive one, “JOMO” conveys the message that missing out is not only acceptable but also desirable. The FOMO may induce people to make rash decisions; thus, traders should embrace the notion of the JOMO and slow down sufficiently to reflect, organize and relish their investments.
If you’re a trader, do you ever get “JOMO”?
In the trading world, people motivated by JOMO have a different mindset than those who FOMO drives. Which investor’s thought process comes closest to mirroring your personal style?
FOMO: It makes sense to take that position if everyone else is.
JOMO: Unfortunately, the time window for entry under my trading strategy has passed. I’m going to hold off on making any decisions here.”
FOMO: I’m hoping for a profitable outcome to this position. Hope springs eternal!
JOMO: I’d rather not take the chance with my savings. I base my trades on facts and figures, not hunches.
FOMO: I’m considering taking that position… I’ll give it some thought and get back.”
JOMO: I’ve done the legwork and study and know exactly the position I would like to undertake.
FOMO: So far as I can tell, it is an excellent moment to invest in “blah-blah-blah. I saw that when browsing.
JOMO: I’ve tried to keep up with the newest market developments by reading articles and watching webinars.
What’s going on is very clear to me.
FOMO: “I’m worried that I won’t seize this potential when it presents itself.
JOMO: During the day, I keep tabs on the market stats.
FOMO: I’ve set up various automation systems where I sit back and relax while the system works 24/7 for me.
JOMO: I refuse to waste precious time by passing up promising prospects. If I don’t make any trades, it will be by purpose.
These two market participants exhibit significantly different patterns in their behaviour.
Some characteristics of a JOMO investor go beyond what the FOMO investors naturally possess: Patience; Detachment; Self-Control; Self-Assurance; Self-Reliance, Fearlessness, Confrontation and Acceptance.
Naturally, things are seldom that black and white. Emotional ups and downs are common for those who trade in the volatile markets of foreign exchange (FX) and commodities. Chart shifts and price fluctuations may cause a wide range of emotions, from fear and panic to greed and euphoria. The FOMO is real and may happen to anybody, but it’s nothing to be ashamed of.
JOMO can manifest itself in a variety of ways, but it is most easily recognized in cool, under-pressure traders who are content with their approach and it is all within you.
Is there a positive and negative side to JOMO?
Pros: The key benefit is that it aids traders in maintaining self-control and resisting emotional impulses to trade, whether those impulses are borne of monotony or fear. This may be useful since overtrading is a frequent blunder made by traders.
Traders need to practice JOMO since it may assist in managing their emotions and protect them from making poor trading decisions since they don’t easily get influenced by external factors/triggers. Traders may take a deep breath, unwind and think things through more clearly when practicing JOMO.
They will be less prone to initiate transactions on the spur of the moment in an effort to prevent losing out on possible earnings.
Cons: The biggest disadvantage of JOMO is the risk that traders would fail to take advantage of favourable market conditions as they do not feel compelled to engage in trading around the clock. Very content to sit this one out.
For them, the euphoria and eventual collapse of a trend are irrelevant to the approval they’re pursuing. Hence, they ignore the opportunity!
Moreover, the JOMO mentality may often cause people to become complacent, which is a dangerous mental state to have while investing in unpredictable markets.
So how can one give in to the JOMO?
The secret to experiencing JOMO is Putting some distance between yourself and your transactions and giving them careful consideration is essential if you want to successfully embrace JOMO.
Strategize your entry and exit and make doubly sure the risks you’re undertaking are acceptable to you. I cannot stress this enough: have fun with it! The financial markets may be tense, so taking breaks and enjoying life outside of trading is crucial.
Traders should familiarize themselves well with both JOMO and FOMO. The FOMO encourages us to learn as much as possible and advocate for causes we care about, whereas the joy of missing out on JOMO encourages us to slow down and think things through before acting.
The benefits of JOMO shouldn’t distract us from the risks of FOMO, however.
Strategies for Handling Unpredictable Trading Events (FOMO To JOMO)
Forex trading carries the risk of substantial price swings due to the market’s inherent volatility. Even if there is a possibility of achieving huge profits (during FOMO), there is also the possibility of incurring significant losses.
For this reason, prospective traders should familiarize themselves well with risk management concepts before putting their money on the line.
Many strategies may be used to cope with extreme volatility in the foreign exchange market. The first is the utilization of stop-loss orders, which cause a trader’s account to be liquidated at a predetermined loss if the market price drops below that threshold.
In the case of a sudden price decline, this strategy might assist in cushioning the blow. Margin trading is another option that gives you access to leveraged trading. Knowing the potential upsides and downsides of this strategy is crucial.
Keeping a trading diary may also be a game-changer since it provides a record of trades previously concluded and space for introspection and analysis. You may use it in tandem with a trading strategy to sharpen your focus and gather insight.
Rather than blindly adhering to crowds out of fear of losing out, traders who maintain journals are more likely to act responsibly on their own behalf.
Optimize your mental approach to trading. Traders may experience a plethora of emotions, all of which might weigh heavily on their judgment and cause them to make rash choices. Developing a more positive attitude toward trading might help you overcome your flaws (FOMO) and experience more success (JOMO).
High volatility may be managed in other ways as well, such as by accepting it as inevitable and adapting trading strategies appropriately. Being risk-tolerant implies you welcome the chance of greater gain if taking on more danger. It includes being ready to cut your losses swiftly if the market turns versus your prediction.
The desire to get wealth rapidly is the seedbed of FOMO. Many investors think they may make a quick profit of two or three times their initial outlay by purchasing and holding on to them for a while
Traders who suffer from FOMO are more likely to make impulsive decisions and trade on many occasions a day.
These high-stakes deals not only physically affect traders, but also negatively affect their mental health, causing tension and insomnia.
Trade, at whatever level, should not have a negative effect on one’s quality of life and is supposed to be a fulfilling activity full of learning and growth possibilities. Maintain a positive outlook on trading by making an effort in that direction.