Ever sit and watch the charts and see the price of your favorite crypto drop down to support levels only to see it start to pump? You sit and watch it thinking that we’re in a bear market and the price, while going up, is bound to go down but you start to get scared, then you start to sweat and panic until you can’t take it anymore and you buy half way through the pump. You think you’re going to ride it up only to see the price start to fall and then crash through the support levels and your entry price is now a huge negative. You then sell thinking you’re going to cut your losses only to have the price start to rise again. What the F*CK just happened? You FOMO’d into it and lost money.
What Does FOMO Stand For?
FOMO stands for Fear Of Missing Out. An acronym that causes a lot of people to lose a lot of money thus causing a lot of people pain. Before I go on I’m going to tell you to stop FOMO’ing into crypto. You’ll save more money if you follow a few guidelines and kick those emotions to the curb.
In this post I’ll talk about FOMO as it relates to investing. As a newbie in the cyrpto world, you don’t want to start out trading. If you’re new then you’ll get wrecked (REKT) and you’ll lose it all so start out by investing, not trading. I’ll write about trading in a future post.
The difference between trading and investing is with trading you bet against a rise/fall (Long/Short) and you get in and get out making money as the price goes up or down. With investing, you’re putting money into crypto for the long haul.
How Can I Stop FOMO’ing Into Crypto?
The best way to stop your FOMO is to set those emotions aside and simply look at the charts. If you’re new to charts then go YouTube some videos on how to use TradingView. It’s the best chart analyzer out there and it’s what we use to chart crypto.
There’s a saying in crypto and it’s “When in doubt, zoom out.”. What it means is that if you’re looking at the 1 minute chart you’ll see the price going all over the place, what an asshole right? It goes up and down and if you’re invested in it then you’re going to drive yourself mad looking at it so zoom out to the 1 hour chart or the 4 hour chart. It will give you the best idea of what your crypto is doing. There’s another saying and it’s “The trend is your friend until the end.” and that simply means that you can follow the trend up or down until it changes direction.
Lets take Bitcoin for example. If it’s trading at $46,000 dollars and the 1 hour chart is showing a downward trend then you can expect the price to continue to go down until it doesn’t. Keep in mind that a price won’t go down too far because it will hit what is called a “Support Level”. This means that there are a lot of people that don’t want it to go below that. You can see this in previous charts. If you zoom out you’ll see that there has been previous support levels at a certain price. For this example I’ll use the $44,000 as a previous support level so what you want to do is wait to buy until it hits that support level if the trend is going down. When it does hit that support level you can buy into it. The previous trends will show that the price hits the support level and then bounces off of it to change the direction (Trend) to upwards action. If you buy at that support level you’re doing what is called “Buying the dip” which means you bought when the price dipped down. Never buy crypto at the top, buy at the bottom right as the price action is starting to move upwards and don’t dump all of your money into it. You’ll want to DCA (Dollar Cost Average) into it.
What Is Dollar Cost Average?
Dollar Cost Averaging or DCA is where you put in a fixed amount of money into crypto every so often. For example, say you work a 9 to 5 job and you get a fixed salary paycheck every week. You could take $100 dollars out of your check and buy Bitcoin every week. What you’re doing is investing in crypto over time and over time you’ll be filling your bags with Bitcoin.
You’ll want to get the best entry price point for your crypto. If you buy at the top then you get less crypto then you would if you bought at the bottom (Dip) and of course this is not financial advice.
Taking Profits Along The Way
If you’re new to crypto then you’re going to hear this term a lot and it means exactly what it says. Take profits along the way!
Say you invested in Bitcoin at $45,000 dollars and the price goes to $55,000 dollars. You don’t want to sit at $55,000 dollars only to enter a bear market and ride the price back down to $45,000 dollars. You’ve done nothing but lost money so what you want to do is take profits along the way up. When the price hits $47,000 cash some out. Do this as the price continues to go up because what goes up will come down and you don’t want to get stuck like Chuck so take some profits along the way. When the price goes back down you can buy more Bitcoin. Rinse and repeat.
More FOMO FAQ’s
What is getting rekt?
Getting rekt (Wrecked) is when you lose all of your money in a trade. While this does relate to investing it means more in terms of trading. Not setting stop losses and or taking profits.
Distract Yourself From Crypto
You need to take breaks so before you do that investing or trading, clear your mind. Go play video games, do some yoga or meditation. Enter with a clear mind and agenda.
Should I listen to social media?
Absolutely not. There are people on social media who are looking to pump and dump. They promote a crypto in order to get people to buy it only to dump it when the price rises. This is a classic pump and dump scheme. Don't feed into social media. Do your own research!