What is JOMO in crypto trading?
JOMO stands for the joy of missing out – especially when a cryptocurrency trader refuses to follow the crowd. This is the opposite of FOMO, or fear of missing out, and is the counterbalance to price rallies driven by hype and frenzy.
What is JOMO in crypto trading?
In crypto trading, JOMO comes from not following the herd, which is often wrong, and ultimately avoiding a potentially huge loss.
For example, the recurring bullish calls in the Bitcoin market during the 2020-2021 bull run likely caused many people to buy at the top in anticipation of more upside.
Many market commentators, including analysts at Standard Chartered and JPMorgan & Chase, predicted in 2021 that the BTC price would reach $100,000 by the end of the year. The widely tracked Stock-to-Flow (S2F) model further strengthened the bullish argument, given its accuracy throughout most of Bitcoin’s bull and bear cycles.
However, the Bitcoin price fell below its popular $100,000 target after hitting a November 2021 peak of $69,000, and is currently down 60% since.
Thus, the JOMO traders who either sold or did not buy entered the rally at that time. Moreover, they also retained the capital to enter at lower levels when FOMO does not exist, such as in June 2022 which marked Bitcoin’s last price bottom.
JOMO after the Bitcoin price peak
One of the few JOMO traders who didn’t buy into the overly optimistic end-2021 Bitcoin predictions was market watcher Michael Gogol. He reduced his crypto exposure a month before Bitcoin’s peak, expressing his relief in May 2022.
On the other hand, one trader admitted that he had bought Bitcoin for $60,000 in October 2021 after being convinced by the market’s anti-inflation narrative. He said:
“The whole inflation thing finally clicked. I panicked and entered almost at the ATH of 69k. Feeling bad. Went down the rabbit hole, hours of research.”
Turn FOMO into JOMO
FOMO stems from the goal of making money quickly. Many gullible traders believe they can double or triple their investment within days, weeks or months by investing cryptocurrencies.
Typically, traders with FOMO syndrome may open or close their trades several times a day without putting significant thought or strategy behind them. These high-risk trades also affect traders mentally, even leading to stress and sleep deprivation.
Here are four steps a trader can take to turn FOMO into JOMO:
- Develop a trading plan.
- Keep a trading journal to monitor your trading patterns.
- Analyze potential trades using several calculations, including fundamental and technical analysis.
- Ignore emotions, follow your plan and adjust accordingly.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
