Peter Brandt: How to beat Bitcoin FOMO

16 Jun, 2019
by Will Heasman
Opinion
Peter Brandt: How to beat Bitcoin FOMO

Bitcoin triumphs over yet another impressive milestone, and investors are inevitably celebrating, however, there is no escaping the psychological pressure of FOMO; whether you’re all in, or you missed the opportunity to buy lower, this fear of missing out can strike even the most veteran of crypto traders. Luckily, famed analyst Peter Brandt has outlined a few ways to overcome the instinctual urge to FOMO.

It’s always the same, whether it be the crypto market, or legacy investments FOMO is omnipresent. Unfortunately, the (often) irrational fear of missing out on an opportunity, is simply a factor of life.

Notice how this fear is almost never present within a bear market, or during a dip, in fact, the opposite is true. Throughout these episodes the natural urge to either sell or hold on for dear life kicks in, but it rarely instinctively crosses your mind to buy during a downturn, only during a rise.  

Thankfully, we have many maestros within the crypto industry on hand to offer their sage advice, traders and analysts whos lengthy careers have seen them weather their fair share of bear markets and FOMO. One such trader is Peter Brandt, who shared guidance on how to beat this fear of missing out.

Step one: Plan

First, Brandt points out that every trader should have a plan of action which precludes the chasing of market rallies and dips. This is perhaps the most important step, as it’s the chasing of these peaks and troughs that offer investors the worst returns.

Step two: Stick to the plan

Another tip suggests to only revise stop and target orders once per day, or on a predetermined schedule. This helps to negate the succumbing of FOMO by forcing traders to stick to a more rigid plan; and while this could be deemed as inflexible, it’ll inevitably stop a hot-headed reaction to volatility.

Step three: Look away

The next step is a simple one - look away from the charts. Brandt suggests that watching market action only increases FOMO.

Step three: Countertrade your feelings 

And lastly, Brandt notes that the realization of successful trading is less of a “cognitive endeavor” and more of a “battle against your inner demons.”

In essence, Brandt is advocating making a plan, sticking to it and fighting against every natural urge to break the strategy when volatility arises.

Quite a few Twitteratis agreed with Brandt’s advice:

For one though, the pull of FOMO is simply too strong:

Counter trading natural urges has been the cornerstone of successful investing for many years. As Bitcoin basher Warren Buffet once said:

“be fearful when others are greedy and be greedy when others are fearful”

What do you think? Has FOMO ever helped you gain? Or is sticking to a detailed trading plan better for the long term? Let us know your thoughts in the comments below!

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