FOMO and Chasing Price
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FOMO, or fear of missing out, is the fear that we are missing a profitable market move. In trading, this can lead us to enter late, chase rapidly moving prices, or abandon predefined entry criteria.
Why Chasing Is Dangerous
When price has already moved strongly, our emotional perception can make the opportunity appear more urgent than it actually is. Entering without the original setup can produce a worse entry price, larger risk, and an unclear invalidation point.
Professional Response
We do not need to participate in every move. If the setup is gone, the professional response can be to wait for the next valid condition rather than inventing a new reason to enter.
Key Terms
FOMO, fear of missing out, chasing price, entry criteria, setup, patience.
Knowledge Check
- What is FOMO?
- Why can chasing price worsen trade quality?
- What can we do when the original setup is no longer present?