The syndrome of lost profits in mining and trading
A lost profit is considered to be a profit that a person could have received, but lost due to their own actions or third parties. FOMO, also known as lost profit syndrome– is an abbreviation of an English phrase that translates as “fear of missing something.” This concept is applicable not only for traditional business, but also for such modern phenomena as mining and trading.
What is the lost profit syndrome?
The cause of this syndrome is the fear of missing out on a possible benefit in a certain area, usually in mining or trading. Such a syndrome is often compared with the herd instinct and is even called a folk disease.
It’s not just a desire to earn, it’s a fear of not earning everything. A typical example of FOMO: a person, tracking current events, seeing how others earn on investments, does not want to miss his profit and starts investing money in everything. Often such behavior is not justified by anything and is not based on a reasonable analysis of the investment market. As a result, the investor loses many times more than he earns or could earn on a particular product.
It is worth noting that this syndrome is observed not only in people who really earn something, but also in those who strive to be in the center of events. This category of people is constantly struggling with the fear of missing something important in life, for example, some social event, a sensational film screening, a premiere at the theater or a sale. Such fears are especially intensified against the background of the well-being and busy lives of other people, including those from the environment of a person suffering from FOMO.
What is the FOMO-FUD cycle
This is understood as a psychological technique, deliberate actions of marketers, traders, miners or others interested in attracting the attention of persons aimed at increasing interest in a particular product up to hype, propaganda, formation of the necessary opinion of society regarding something. This technique is similar to advertising, but it has a much more destructive effect on the psyche of people. Potential victims of the FOR-FUN cycle are dissatisfied with life, people suffering from the syndrome described above, who are ready to sacrifice everything for a certain benefit, no matter what it is expressed.
In another way, this cycle is called the “cycle of fear and greed.” During the last year, propagandists have been conducting an informational and psychological struggle, the purpose of which is to capture the attention of the masses and involve them in certain activities. In the financial sector, the ultimate goal of the cycle is to attract as many new investors as possible.
Examples of FOMO in mining and trading
If the syndrome of lost profits is not so noticeable in social life, then in the field of trading, investment and finance in general, there has been a real boom in recent years. Some experts attribute this to the dream of citizens to make money out of nothing, as well as the desire to preserve and increase their savings through profitable investment.
Investing in various profitable instruments, trading and cryptocurrency are now among the most popular topics. Capital holders invest money in everything: in currency, in cryptocurrency, in stocks, bonds and other instruments for profit. However, due to lack of experience, they often incur losses and rush to withdraw the remaining funds from assets. The following examples clearly show the syndrome of lost profits in mining and trading:
- Against the background of rapidly growing quotations of cryptocurrencies, newly minted investors, seeing in them the future of the global financial market, rushed to register on exchanges and invest real money in trading electronic means of payment. After a while, the value of the cryptocurrency falls, and novice investors begin to urgently close positions and withdraw funds if possible. And so on until the next exacerbation of the lost profit syndrome. The problem is that not every trader has enough experience and endurance to wait for the price to rise, so many get rid of assets at a loss.
- People who want to make a good profit at the expense of cryptocurrencies are considering such an option as mining (mining of cryptomonets due to the capacity of equipment). As recently as in 2021, there was a huge demand for mining equipment in many countries of the world. Such demand provoked the growth of cryptocurrency rates. In response to the growing demand, prices for professional video cards have increased. It is easy to guess that the reason for this is FOMO, as well as the notorious “cycle of fear” provoked by the community members themselves.
How to overcome FOMO
A successful outcome in the fight against the lost profit syndrome is ensured by eliminating the causes of its occurrence. The reason is often the FOMA-FUD cycle, and in order to eliminate it, it is necessary to limit the flow of information from the outside. To do this, experts recommend:
- remove unnecessary applications, unsubscribe from annoying mailings and block pop-up notifications;
- log out of groups and accounts that do not carry anything useful;
- check news and quotes strictly on schedule, for example, in the morning and evening, and not every hour;
- restrict access to the Internet (rarely pick up a smartphone and sit down at the computer);
- schedule work with personal and service messages (at certain times to work with some, and at other times with the rest).
For novice traders, miners and investors, professionals offer several tips that will help you resist temptation and avoid FOMO:
- Act without looking at the past. If you think that you have already missed your chance to profit, you are mistaken. Experienced traders analyze the state of the market at the time of opening a deal with a perspective for the future, not paying attention to the general opinion and opinions of other investors.
- Don’t be afraid to sell when everyone is buying and buy when everyone is selling. Quite a difficult task, but according to some traders on the stock exchange, you need to go against the trend.
- Follow the goal clearly. The horse is not changed at the crossing. For example, if you choose a strategy to achieve the target value, you need to wait until the rate reaches your indicator, and then sell the asset, fixing the profit.
- In the absence of ideas regarding the investment of funds, it is better to wait for time. Until then, close profitable trades and redistribute investments in the portfolio. And when the next boom happens in the market, you can invest profitably.
- Do not stop there, constantly improve. Even if it seems to you that you have reached the maximum, look for new investment tools that will bring even greater profit.
- Do not give in to general panic and never invest all your savings in investments. Set yourself a certain limit that you can risk. Remember! A person should always have an inviolable reserve for the future.
Published: 14 October, 2021