The Difference Between Fomo VS Fud

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  • October 21, 2020
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Being indifferent to these two matters after knowing who they are and what they can do

(October 21, 2020) – Feelings and emotions can get in the way of level-headed trading. Strong emotional reactions can lead us into decisions that we do not normally do under normal circumstances. But when we get involved too much in bad news headlines that are putting down our investments., we forget the fundamentals. After finding out that we have been played, it might be too late to get out.   

FUD

FUD is the abbreviation of negative sentiments called Fear, Uncertainty, and Doubt, that affects the value of coins, companies, projects, or even the entire market for that matter. FUD is so powerful that any sound investment made can turn bitter in the blink of an eye after coming full circle. Sometimes FUD can start with forgettable misunderstandings, some legit concerns, or it can go as far as a manipulated sentiment played out on mass or social media. The bad news that was spread, unsubstantiated, and opinionated at best, can drop a coin price.

FOMO

FOMO means Fear of Missing Out. It is a more personal impulsive act of being afraid to be left out in the cold by not being able to participate in something that others are enjoying. FOMO makes your decision-making irrational by buying an already expensive coin or token which you are anticipating of still shooting up, or holding on in the dip after scooping gains and lose them in the end. FOMO is all about beating a deadline, or jumping on an opportunity before it vanishes, or taking bargain prices without turning to fundamentals and charts. The haste can painfully turn to waste.

FUD and FOMO are fear-based emotional factors that can really interfere with objective trading among investors in the crypto and other financial markets. Arm yourselves with continuing education and training to combat these trading errors. Major points include:

  1. Sticking to the fundamentals and the charts. If your basis for decisions is a good-looking chart and the presence of fundamentals, then you need not fear. Keep your emotions out of it.
  1. Identify FUD and proceed with caution. React accordingly if you see that the coin price is sliding in an irrational manner. Set your stop-loss and get ready to buy yourself back in on the dip.

These are two general advice that may be applied in situations when you feel there is a need for it. In the end, you call the shots when you are either in a long or short trading strategy.

Conclusion

FUD and FOMO are trading schemes which happen every now and then especially to newbies and unsuspecting traders. Both seasoned investing personalities and unknown trading actors can spread seemingly truthful assumptions regarding your investment enough to affect market prices. Once small fries are biting, cheap chips are there for their own picking. Do not fall prey. Avoid FOMO and FUD altogether. Strong character can be developed with training, education, research, and getting your facts right well enough to control blind emotions on your way to becoming a resilient investor.

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