With multiple risks in the crypto market, not everyone is willing to take risks in trading. In particular, JOMO is the joy of missing out when any trader does not follow the market trend or other traders. JOMO is contradictory to FOMO in the crypto market. It helps maintain the price hikes in the market created through hype and unrest by traders. In this guide article, we will learn the role of JOMO in the crypto market.
Understanding JOMO in Crypto Trading
When a trader refuses to follow the crowd moving in the wrong direction in crypto trading, the condition is known as JOMO. In 2021-22, many people followed the bullish market trend and bought crypto assets at high prices. It led to a loss as they expected more price hikes, but it did not happen.
At the start of 2021, many market experts at JPMorgan Chase and Standard Chartered predicted that by the end of the year, Bitcoin prices would increase to 100,000 dollars. In addition, the bullish argument got a boost through the stock-to-flow model. It is a widely adopted model that has predicted accurate results in many bull and bear markets.
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However, the price of Bitcoin peaked in November 2021 and suddenly fell from the predicted target. Therefore, the traders who did not buy or sell their assets experienced JOMO. It saved their capital, and they entered the market later when the prices stabilized in the middle of 2022.
JOMO After Hike in Bitcoin Price
In late 2021, when the market was quite optimistic about increasing Bitcoin prices, Michael Gogol was one of the JOMO traders who did not follow the market trend. Later in 2022, he expressed relief as he saved his crypto assets through reduced exposure in the market. However, a few traders also expressed that they experienced losses while trading Bitcoin at low prices.
The Transition of FOMO into JOMO
FOMO is the fear of missing out. It is created when traders rush to earn more capital in the short term. Traders aim to multiply their capital by twice or thrice in minimum time. They want their income to increase within a few days; therefore, they do not want to miss any opportunity in the market.
In such conditions, traders do not follow any proper market strategy or plan. They open and close their market positions several times in the market. It increases the risk of loss and creates several other issues. Traders may face a lot of stress and mental health issues. Traders can follow several steps to transform their FOMO into JOMO.
Firstly, traders need to follow a proper trading strategy and plan. They need to decide all their market moves and how to manage uncertainties. Moreover, recording all the steps and directions in a trading journal is essential. It helps in pointing out the causes of failure or loss.
In addition, traders should develop a thorough technical analysis of market conditions and fluctuations using market tools and metrics. These tools help in carrying out the fundamental market examination. Most importantly, traders should not allow emotions to drive their market decision. They should always think rationally and logically before making any market move.
Ways to Deal with High Market Volatility
High market volatility is a significant risk factor in crypto trading. Traders aim to earn the maximum, causing FOMO. However, uncertain losses then lead to JOMO. Therefore, traders need to learn correctly to deal with such conditions. For this purpose, it is crucial to apply stop-loss orders that would automatically sell the assets in the market if the price declined. In addition, traders can also use margin trading to trade with maximum exposure and utilize leveraged products.
JOMO encourages traders to make informed decisions and plan appropriately before investing in the crypto market. It helps stabilize the trades without focusing on any hype in the market.