The Fear Of Missing Out

One common problem that I think many traders have is the fear of missing out. I know this is a problem because this is something that I myself have learned to deal with over the years and even now I still jump the gun because I fear that I will miss out on a potential move in the market.

One way to overcome the fear of missing out is to have a well thought out trading plan with specific rules for entry and exit. By having clear rules that you have researched thoroughly on past data, you will take some of the emotion out of trading and your confidence will also increase.

One problem that I see myself doing quite often is that I tend to jump the gun with my entry. For example, if my system says I should enter the market when the moving averages cross on an hourly closing basis, I tend to enter before the hourly close because the market may be moving rapidly in the anticipated direction and I fear I will miss out if I wait for the hourly close. This almost always causes me to enter prematurely and it usually costs me money because the averages never actually crossed on a hourly closing basis. What has helped me overcome this tendency to jump the gun is to not watch the markets until a few minutes prior to the hourly close. So for example, if I have a watchlist of stocks I am looking to buy on the 60 minute time frame and my entry is a crossing of the moving averages, I will scan my list of stocks at 9:55. 10:55, 11:55 12:55...etc. By doing so, I will not be tempted to enter the market prematurely.

If your system is to enter the market based on the daily close, it might be helpful to watch the market during the last 15 minutes of the day so you can scan your watchlist of stocks that are setting up for a potential trade. By waiting for the last 15 minutes of the day you avoid tempting yourself from entering the market during the day.

So there you have it. By having a well written trading plan for entry and exit and by limiting your time in front of the computer, you can help overcome some of the fears you may have of missing out on a potential move in the market. This has helped me a great deal and has also reduced much of the stress I was experiencing. I hope this helps you as well.