Please note the political opinions expressed below are those of the author himself, and do not necessarily reflect the opinions of JP Fund Services AS.
Picture this: you show up to a party fashionably late, only to discover the buffet’s been ransacked.
Your choices? A sad, curling cheese sandwich or a lonely cocktail sausage that’s seen better days. That’s essentially what happens when FOMO drives your trading decisions. Sure, you made it through the door, but you’re left picking through the scraps nobody else wanted.
And here’s the kicker – as you’re walking in, you’ll probably pass sharply dressed guests already making their exits. “Leaving so soon?” you might ask. “Yeah, it was fantastic, but we’re off to the next one. You should definitely go in though!” they’ll say with a knowing smile.
Now, arriving early to a party means you might stand around awkwardly for a bit before things get going. But that brief wait is infinitely better than showing up after last call.
The market has taught us this lesson repeatedly: latecomers almost invariably become bag holders, while those who positioned early are already celebrating their wins elsewhere.
Trading comes down to two things – timing and discipline. FOMO is purely emotional, and it obliterates both. When fear takes the wheel, discipline goes out the window, and your capital often follows right behind it.
Yes, making money requires taking risks – nobody’s arguing otherwise. But those risks must be calculated, methodical, deliberate. Fear has no place in that equation.
Earlier this month, we emphasized a crucial point: “the trend is your friend, until it isn’t.” We highlighted how dollar weakness couldn’t be taken for granted, and how any reversal might impact Bitcoin and gold – both of which had been rewarding patient long holders handsomely.
More recently, we’ve cautioned against chasing runaway equity markets. And just last week, we identified the ongoing energy selloff as a potential entry point for those with the nerve to buy into weakness.
Have we missed some moves by refusing to chase? Absolutely. As a contrarian, we often have to wait for markets to recognize that rallies and selloffs have exhausted themselves. But here’s what matters: we rarely find ourselves on the wrong side of a trade. And crucially, by staying ahead of the curve, we’re almost never caught holding positions right before a trend reverses.
We don’t provide trading recommendations, as that is not our remit, and we also don’t want to get into trouble with the authorities (Bloody rules and regulations). Instead, we try to offer warnings and advice which will prove valuable for those who might be panicking, based on the noise from trend followers, or more recently, over-eager influencers with an agenda.
We try to delve into the emotional influences on the markets, and use our technical analysis abilities to forewarn investors before the noise takes over and the fear sets in.
I would recommend readers follow our weekly chartbook, which examines various charts based on solely on technical patterns and indicators, and is never issued to justify our own personal views, something too many less seasoned “analysts” often do.
For months now I have been experimenting with AI, trying to discover which “prompts” will provide timely entry and exit levels for my speculative activities. I am sure millions of others are spending their time doing exactly the same, and indeed, I know of a few funds which base all their investing on the result of what they ask AI to provide.
Trying to find an automated system which makes money consistently would be a fabulous discovery, but where is the fun?
I don’t know about most people, but we have to have fun doing what we do, we have to enjoy our days behind the screen, and we have to keep learning and improving our own skills. Think about it: I’ve been in this business along time, and as much as I try to pass on some of my experience and knowledge, I am still learning and trying to improve what I do.
We don’t dish out specific trading recommendations – that’s not what we’re here for, and frankly, we’d rather not have the regulators breathing down our necks. What we do instead is offer perspective and guidance that cuts through the noise, especially when trend-chasers and agenda-driven influencers have everyone worked up into a frenzy.
Our focus is understanding the emotional undercurrents moving markets, then using technical analysis to give investors a heads-up before the hysteria takes hold and rational thinking goes out the window.
Maybe it’s just us, but we need to actually enjoy what we do. We need to find satisfaction in the hours spent analysing screens, and we need to keep sharpening our skills. Consider this: I’ve been at this game for a long time, and while I try to share whatever experience and knowledge I’ve accumulated, I’m still learning. Still trying to get better at what I do.
We will never be perfect, our investments will not all pan out as we expect, but fear is hardly a good reason to risk your money in these high-stake markets. Unless that fear is held by others, and you can profit off their emotional failings…
Until next week…
The post Your “Fomo” Allows the Smart Money to Exit with Profits first appeared on JP Fund Services.
The post Your “Fomo” Allows the Smart Money to Exit with Profits appeared first on JP Fund Services.
The post Your “Fomo” Allows the Smart Money to Exit with Profits first appeared on trademakers.