Top Trading Lessons: Try to Avoid FOMO
I think an important aspect of markets in 2020 has been trying not to get FOMO (Fear of Missing Out) when volatility was shooting up and “easy profits” could be seen flying around. More than once I have found myself placing a trade based on a news headline and the subsequent market reaction, without thinking out the logic behind the market move or my trade, leading to painful losses and a feeling of foolishness for allowing myself to go with the flow rather than set up a strategy behind a trade, meaning my risk-reward ratio was completely off. Although it’s going to be hard to avoid the temptation to try and make a quick profit when markets are moving significantly, my goal going into 2021 is to think about a strategy before placing a trade, regardless of the timeframe I have in mind for said position.
--- Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.