{"id":1032,"date":"2018-06-04T06:00:58","date_gmt":"2018-06-04T13:00:58","guid":{"rendered":"https:\/\/www.steadytrade.com\/?p=1032"},"modified":"2019-04-05T12:02:31","modified_gmt":"2019-04-05T19:02:31","slug":"ep-42-fighting-fomo-aka-stephen-loses-another-5k","status":"publish","type":"post","link":"https:\/\/www.steadytrade.com\/ep-42-fighting-fomo-aka-stephen-loses-another-5k\/","title":{"rendered":"Fighting FOMO (aka Stephen Loses another 5k!)"},"content":{"rendered":"\n<div id=\"backtracks-player\" data-bt-embed=\"https:\/\/player.backtracks.fm\/st\/steadytrade-com\/m\/ep-42-fighting-fomo-aka-stephen-loses-another-5k\" data-bt-theme=\"dark\" data-bt-show-description=\"false\" data-bt-show-comments=\"false\" data-bt-show-art-cover=\"true\">\n<p><b>Episode 42: Fighting FOMO<\/b><\/p>\n<\/div>\n\n\n\n<p><span style=\"font-weight: 400;\">Do you want to hear a scary story? In today\u2019s episode, hosts Tim Bohen and Stephen Johnson are going to share a true tale of terror featuring a villain that strikes fear in the heart of every trader: the FOMO monster. <\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Recently, Stephen was attacked by the FOMO monster in a trade, and it bit him big time, resulting in a staggering $5k loss. So what happened, and how could he have avoided it? Let\u2019s explore.<\/span><\/p>\n\n\n\n<p><b>What is FOMO? <\/b><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">FOMO stands for Fear of Missing Out. While it can affect any aspect of life, in the trader\u2019s world, it can be particularly ruinous. Fear of missing out on a hot trade can make traders act and react in uncustomary ways and make, quite frankly, stupid decisions. In the episode, Tim and Stephen evaluate how this affliction can affect traders and how to overcome it. <\/span><\/p>\n\n\n\n<p><b>What went wrong with Stephen\u2019s trade? <\/b><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Stephen recently suffered a $5k loss as the result of falling prey to FOMO. So what went wrong? <\/span><\/p>\n\n\n\n<ul><li style=\"font-weight: 400;\"><b>He went in too early.<\/b><span style=\"font-weight: 400;\"> Tim and Stephen discuss how timing matters with trades, and how a fear of missing out led Stephen to jump in earlier than he should have. As Tim explains, the volume and morning highs could have helped inform Stephen back off from this trade because it probably wasn\u2019t a good moment as a short seller. <\/span><\/li><li style=\"font-weight: 400;\"><b>He lost sight of the basics.<\/b><span style=\"font-weight: 400;\"> In his excitement to catch the trade, Stephen neglected to properly consider basics like the stock volume. With insane spikes, a trader must be aware that there can be a potential reclaim of the morning highs. <\/span><\/li><li style=\"font-weight: 400;\"><b>He got too hopeful. <\/b><span style=\"font-weight: 400;\">Stephen kept waiting for a dip in the stock price that never came. Unfortunately, wishful thinking rarely delivers the results in the stock market. <\/span><\/li><li style=\"font-weight: 400;\"><b>He broke his plan. <\/b><span style=\"font-weight: 400;\">Stephen wanted this trade to work so bad that he broke one of the biggest rules of trading: he didn\u2019t stick to his trading plan. He began adding when he hadn\u2019t planned to, hoping for a comedown in the stock price that never came. As he can now say in retrospect, \u201cIf a stock ever spikes and then fails and then starts retracing and going higher, all of the shorts are underwater, and everyone is stuck.\u201d<\/span><\/li><li style=\"font-weight: 400;\"><b>He got cocky. <\/b><span style=\"font-weight: 400;\">Stephen had been on a winning streak in his trading. However, as he puts it, he lost touch with reality by virtue of being up $6-7k. You always have to approach the market and its risk with respect. As Tim adds, \u201cRecognize when you\u2019re on that hot streak. There\u2019s no point in giving back 5 months in gains because you get cocky\u201d. <\/span><\/li><\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Ultimately, Stephen says that he \u201cloves nothing more to see a spike and then fail as a short seller.\u201d But if it spikes, fails, then consolidates, everyone\u2019s in for trouble. <\/span><\/p>\n\n\n\n<p><b>What did he learn? How do we avoid the third \u201cStephen Loses 5k\u201d episode? <\/b><\/p>\n\n\n\n<ul><li style=\"font-weight: 400;\"><b>Look at price action and volume. <\/b><span style=\"font-weight: 400;\">Never neglect to look at these basic indicators. If a stock hasn\u2019t traded much volume in its past but suddenly does, it has the potential to break new highs. <\/span><\/li><li style=\"font-weight: 400;\"><b>Cut losses when necessary. <\/b><span style=\"font-weight: 400;\">Traders seem to forget that cutting losses quickly is important when you\u2019re trying making money. As Tim says, \u201cyou must be an assassin when it comes to cutting losses\u201d. You must be heartless and calculated, because sometimes, there\u2019s nothing that can be done to salvage a trade. <\/span><\/li><li style=\"font-weight: 400;\"><b>Stick to the plan. <\/b><span style=\"font-weight: 400;\">FOMO can cause you to make some big mistakes. To help yourself avoid FOMO, make and stick to a <\/span><a href=\"https:\/\/www.steadytrade.com\/building-a-trade-plan\/\"><span style=\"font-weight: 400;\">trading plan<\/span><\/a><span style=\"font-weight: 400;\">. <\/span><\/li><li style=\"font-weight: 400;\"><b>Don\u2019t reinvent the wheel. <\/b><span style=\"font-weight: 400;\">Don\u2019t take big positions with trading patterns you\u2019re not familiar with. This trade wasn\u2019t Stephen\u2019s bread and butter set up, and he was more likely to fail simply because of this fact. <\/span><\/li><li style=\"font-weight: 400;\"><b>Don\u2019t be a dreamer. <\/b><span style=\"font-weight: 400;\">HOPE is the worst four letter word in trading. Instead of being a dreamer, be calculated. Let the numbers and data guide you. <\/span><\/li><li style=\"font-weight: 400;\"><b>Time of day matters. <\/b><span style=\"font-weight: 400;\">Stephen should have waited until the setup truly was perfect. Patience is a virtue! <\/span><\/li><\/ul>\n\n\n\n<p><b>Want more? <\/b><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Got a question or suggestion? Visit the <\/span><a href=\"https:\/\/www.steadytrade.com\/submit-your-audio\/\"><span style=\"font-weight: 400;\">\u201csubmit your audio\u201d<\/span><\/a><span style=\"font-weight: 400;\"> portion of the website to share your thoughts. <\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Thanks for tuning in to the Steady Trade Podcast! Stay tuned for weekly episodes focusing on topics relevant for aspiring traders!<\/span><\/p>\n\n\n\n<p><b>Did you love this episode? Be sure to leave an <\/b><a href=\"https:\/\/itunes.apple.com\/us\/podcast\/steady-trade-the-profitable-side-of-trading\/id1275946076?mt=2\"><b>iTunes review<\/b><\/a><b>! <\/b><\/p>\n\n\n\n<figure class=\"wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/anhp1MVg5bo?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Episode 42: Fighting FOMO Do you want to hear a scary story? In today\u2019s episode, hosts Tim Bohen and Stephen Johnson are going to share a true tale of terror featuring a villain that strikes fear in the heart of every trader: the FOMO monster. Recently, Stephen was attacked by the FOMO monster in a [&hellip;]<\/p>\n","protected":false},"author":2283,"featured_media":1038,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[3],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fighting FOMO (aka Stephen Loses another 5k!) - SteadyTrade.com<\/title>\n<meta name=\"description\" content=\"Every trader&#039;s worst fear happens again when Stephen loses another $5k. See why FOMO had something to do with it. 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