Conquering FOMO in Trading: A Performance Psychology Perspective

by | Sep 27, 2025 | The Doctor's Dose

Conquering FOMO in Trading: A Performance Psychology Perspective

Conquering FOMO is one of the biggest challenges traders face on their path to consistent performance. Fear of Missing Out (FOMO) can appear as a simple emotional nudge, but research in performance psychology reveals that it undermines judgment, increases impulsivity, and compromises disciplined execution. To trade effectively, it’s essential to understand how FOMO works and develop strategies to keep it from taking control.

The Psychology of FOMO in Trading

In psychology, FOMO is linked to anticipatory anxiety—the fear that others are benefiting while you are left behind. Przybylski et al. (2013) define it as a “pervasive apprehension that others might be having rewarding experiences from which one is absent” (Computers in Human Behavior, 29, 1841–1848).

For traders, this appears as chasing a stock that’s already in motion. The thought “I’m losing money by not being in this trade” can trigger stress and rash action. Research further shows that high impulsivity and low emotional stability make it harder to resist these urges (Carleton et al., 2019; Journal of Anxiety Disorders, 61, 52–63).

Cognitive and Emotional Drivers

  • Scarcity Bias – Opportunities appear more valuable because they feel fleeting.
  • Social Comparison – Watching others succeed intensifies competitive pressure.
  • Loss Aversion – Missing out feels like a financial loss, even when no trade occurred.
  • Reward Pathways – Dopamine spikes reinforce risky, last-minute entries.

Understanding these forces is the first step in conquering FOMO and protecting your trading discipline.

In-the-Moment Exercises to Reduce FOMO Impulsivity

Performance psychology offers practical, evidence-based tools to help traders regain control the moment FOMO strikes:

  1. STOP Technique — Stop, Take a breath, Observe your thoughts, Proceed mindfully (Segal et al., 2013).
  2. Box Breathing — Inhale 4, hold 4, exhale 4, hold 4; repeat to calm stress and support impulse control (Jerath et al., 2015).
  3. Implementation Intentions — “If I feel the urge to chase, then I will pause for 60 seconds and review my plan” (Gollwitzer, 1999).
  4. Journaling Micro-Pause — Write one sentence: “What rule am I about to break, and what’s the cost?” (Pennebaker, 1997).
  5. Affect Labeling — Say “This is FOMO.” Naming emotions reduces reactivity (Lieberman et al., 2007).

Measuring Your Readiness: The M.T.R.I.

Another powerful step is to measure your psychological profile. The Manz Trader Readiness Inventory (M.T.R.I.), developed at TraderInsight.com, evaluates Emotional Intelligence, Cognitive Reflection, Risk Profile, Impulsivity, and Emotional Stability. By highlighting strengths and vulnerabilities, the M.T.R.I. helps traders design a personalized plan for conquering FOMO and trading with greater consistency.

Conclusion

FOMO is universal, but in trading, it can be especially destructive. Left unchecked, it drives impulsivity, overtrading, and loss of confidence. Evidence-based tools—STOP, box breathing, if–then planning, journaling, and emotion labeling—offer fast ways to interrupt the cycle. Pairing these with the M.T.R.I. creates a framework for growth and lasting success.

Start your journey toward conquering FOMO today by taking the M.T.R.I. at TraderInsight.com.

References

  • Przybylski, A. K., Murayama, K., DeHaan, C. R., & Gladwell, V. (2013). Motivational, emotional, and behavioral correlates of fear of missing out. Computers in Human Behavior, 29(4), 1841–1848.
  • Carleton, R. N., et al. (2019). Fear of the unknown: A mechanism underlying anxiety disorders? Journal of Anxiety Disorders, 61, 52–63.
  • Segal, Z. V., Williams, J. M. G., & Teasdale, J. D. (2013). Mindfulness-Based Cognitive Therapy for Depression. Guilford Press.
  • Jerath, R., Edry, J. W., Barnes, V. A., & Jerath, V. (2015). Physiology of long pranayamic breathing. Medical Hypotheses, 85(3), 486–496.
  • Gollwitzer, P. M. (1999). Implementation intentions: Strong effects of simple plans. American Psychologist, 54(7), 493–503.
  • Pennebaker, J. W. (1997). Writing about emotional experiences as a therapeutic process. Psychological Science, 8(3), 162–166.
  • Lieberman, M. D., et al. (2007). Putting feelings into words: Affect labeling disrupts amygdala activity. Psychological Science, 18(5), 421–428.