I started to study the crypto universe for almost a year now and there are still a lot of things that I have to fix to my behavior when we talk about investing in this world. But I observed in the market that I wasn’t alone. I mean, there are a lot of people doing the same mistakes that I did, and those mistakes make them lose a lot of money. If someone thinks that it is easy to lose money in crypto, he is right. Also, if someone thinks that it is easy to make money in crypto, he is right too. It’s all about perspective, learning, and emotions. If the first two are easy to deal with (for some of us), well the third one is not so easy. When we talk about these emotions we should start with two that I consider being the most common in this area, FOMO and FUD. These two are responsible for almost all losses in this domain. How can that happen? Well, let’s start with the beginning. First of all, let’s see what those two things mean. FOMO is an abbreviation for “Fear Of Missing Out”. As the name already tells us is the fear of being left out from something. In our case, a big event in the crypto universe. But how does it start and how does it work? Well, the sentiment of fear starts in our head when we start to see a lot of hype on some subject that can affect us in a positive or negative way. Yes, this works in both ways. That subject can be crypto, stocks, or sugar doesn’t matter. If there is a big hype on that subject, be sure that someone will start to feel that is left out from that big thing. But how is this playing with us? Let’s say that there starts to appear a lot of news that is saying that Bitcoin is going “to the moon”. Well at that point many people will feel that they will miss the train and they will be left out of the big event so they start to buy a lot. In this way, the market makers bring in the market weak hands, those who don’t know how to manage their emotions and let them control their behavior. After the price touches an all-time high, usually market makers start to sell a lot. These big sales make the price drop and another hysteria begins. At this point, FUD starts. FUD is an acronym for Fear, Uncertainty, and Doubt. But what does all this mean? Well, it is when you have a feeling that it is possible to lose all your investments or to lose all the profits but you are not sure because there is no clue for you what the market will do and you don’t know what to do. FUD is usually started by those who want to make people sell high, in this way they will drop the price down and can start all over with FOMO. I am pretty sure that you heard many times that “Bitcoin and other cryptocurrencies will be banned” or “Bitcoin is just a Ponzi scheme”. Well, those affirmations are just for starting a FUD in the market. But how to not be fooled by FOMO and FUD? The first thing is to start to learn about the crypto universe. Read about how things work in this area. Start to follow people that already have a few years of experience, they usually understand the markets and usually, they are traders or investors in crypto. If you follow such people you will start to understand the logic behind and why and how the market will move. But be careful, you should not take investing advice from those who tell you to invest in a specific project. Usually, those who tell you which project to put your money on are just scammers or they want to hype that project in order to make a bump and dump and take profits from there.
So, what I can tell you is to start to learn how many things you can about crypto because this is the only way to be able to manage your emotions and of course your investments. FOMO and FUD will exist all the time in the investments and the trading world so the best way to not be a victim of them is to have information and you can have that information only if you learn about it.