Learning how to control your emotions is a skill that will benefit all aspects of daily life, especially when it comes to trading.
I’ve made some really stupid mistakes from FOMO trading when I first started out. I lost about half my capital in a matter of hours due to letting my emotions take control.
There is an evolutionary advantage to FOMO, however. If you think back to early humans, being apart of a group or community brought with it a significant increase in your chance of survival. In this scenario, FOMO was really just your brain’s way of saying “Don’t get left behind!”
Thousands of years later, modern humans are still experiencing this fear of missing out, albeit for different reasons.
Despite it’s role in the survival of our species, FOMO is a bitch when it comes to trading.
Nowadays, I’d like to think that my emotions are a little more in check than they were when I first started trading a few years back, but that doesn’t mean I’m immune to experiencing FOMO.
Whenever I miss a move in the market, I’ve learned to accept it and move on. There are too many trades ahead of me, for me to dwell on one in particular. However, when I have been planning a trade for weeks, and I miss my entry because I’m driving or at work or another social event — that’s when I start to get pissed. That’s when those little voices start creeping in telling me to YOLO long/short, and that it’s not to late to get in.
The problem with listening to these voices is that once you jump into a trade, very rarely do you know where to place your stop loss, or even how to manage the trade appropriately.
This strategy will take care of all of those things.
With practice and lots of patience, I’ve found a way that will allow me to quiet those voices in my head, and get me into a trade with some really good R:R set-ups.
This is an aggressive trading strategy by design.
This is your buzzer-beater, half-court shot to win the game. This is your Hail Mary touchdown pass. This is your last-ditch effort to make a play.
Either you get it, or you don’t — regardless you have to be okay with the results. There is no chasing the trade.
This strategy can be used in the following environments:
Short squeeze
Long squeeze
Break outs
Imagine you missed the initial impulsive move of a break out — rather than sitting on your hands, what can you do in order to get involved?
