Balancing FOTO vs FOMO.
A trader turns from amateur to professional when their FEAR OF MISSING OUT (FOMO) exceeds their FEAR OF TILTING OUT (FOTO).
FOTO is the feeling and fear that every trade will put you limit down. You are super defensive, trade small size, and try to stay in the game all day with excellent risk management. This is a great trading plan, but it lacks the upside because of the fear. You’ll trade well, but you’ll trade small peanuts.
So how do you get rid of FOTO. You get over the fear through repetition and proving to yourself that you can handle the risk, the losses, and that every trade will not put you limit down.
When you eventually transition the fear away through repetition, developing your edge, and getting consistent; the FOTO is replaced with FOMO.
FOMO makes you aggressive, makes you trade bigger size, makes you hold winners, because you want to make the most of every one of your winners. You aren’t worried about losing money, you are worried about not making enough on the opportunities you take. This is the stage in your career when you make big coin. FOTO is tucked away, and FOMO is out front and large. It’s a matter of confidence.
FOTO comes back now and again when we go through rough patches and inconsistent trading, but ironing out those issues brings FOMO right back.
So ask yourself watch stage you are in? What do you need to do to progress? Or have you transitioned and just don’t realize it because you aren’t trading big enough. Knowing which stage you are in and doing the right things to move from FOTO to FOMO is how you go from being an amateur small time trader to a big time pro.