Knowing the terms of FOMO and FUD is of utmost importance when it comes to investing in cryptocurrencies. To start the FOMO is the fear of missing something, not to be left behind and miss an opportunity, this expression that in English is Fear of missing out, describes a form of compulsive anxiety not to let “The train goes away”.
The FUD is the opposite, the English Fear, Uncertainty and Doubt, which means fear, uncertainty and doubt, is an expression that qualifies a commercial strategy which is to share negative information in order to harm a competitor.
FOMO and FUD that has to do with Bitcoin?
This type of behaviors that we very often find in our society and in different types of markets, have also been transferred to Bitcoin asset exchange, we often find very positive news in certain stages of the price.
In this area which is called a zone of euphoria, which is when the price starts to rise, optimism is fueled by news that motivates the masses to buy unconsciously, letting themselves be carried away by the “Do not miss this great opportunity”, “Many are becoming millionaires with Bitcoin, and you will be left behind”, “The Bitcoin will reach $ 100,000 and many investors are already betting on it”.
In December entered into force Bitcoin futures contracts known by the acronym / XBT, by coincidence to enter these contracts to the market, the Bitcoin begins a sharp decline from $ 19,980 and on the way we are finding the bombardment of negative news inciting the public to fear what we call FUD.
How to avoid falling prey to FOMO and FUD
The most important of all is that we have a Trading System, but if we manage a strategy and risk management and adequate capital, we can minimize the potential losses that could lead our account to 0.
In the following video we will address the issue of FUD applied to Bitcoin, I hope you like it.
They are the acronym in English for Fear of missing Out, it means the fear to stay out of a great investment opportunity.
When the market is feeling positive, do not get carried away by emotions, always act with logic and according to your trading plan if you see that the price has risen and you find out that it has been due to a very good news, the most likely is that you have already left the train, the price will have already risen what you have to raise for having given that news, remember as a fundamental principle that the market discounts everything.
The difference between the rumors and important news, is that if it is a rumor the market quickly after the rise tend to return to the original price generating a rise in the short term due to speculation, however when the news is really important the trend of the active will continue in the short, medium term and even long term. That’s where the famous phrase “Buy the rumor and sell the news”
It means in English Fear, uncertainty and doubt, or fear uncertainty and doubt. Generally it is a rumor spread by mass media, social networks, corporations and important people to manipulate the prices affecting the psychology of the trader and the feeling with respect to the asset. This is done in order to generate panic sometimes causing sharp drops in the price and buy cheaper to get higher profits, sometimes when prices fall quickly all begin to sell for fear of losing and appear the “seller” that are sellers in panic and generate a chain reaction where more investors sell, the lower the price of the asset and even more investors end up selling.