Those who are just getting into cryptocurrency and bitcoin trading often do so with different approaches. Some are more mathematically inclined, others find strategic thinking and planning ahead easy, while some simply have a natural ability to sniff out good investments from a mile away. However, one thing that’s bound to trip up many new crypto traders in spite of their individual strengths is the crypto lingo. There are a lot of terms and phrases floating around the crypto space that might as well be dothraki.
In the past, we’ve taken a look at the Bitcoin-centric term HODL, now we’re going to pick apart the terms FUD, FOMO, and the context that they’re used in.
Firstly, What is FOMO?
You might already be familiar with this trading term: Fear Of Missing Out. As in the desire to be continually connected with what other people are doing, and having a feeling of anxiety if you’re not a part of something.
It’s similar in the crypto world, except FOMO can lead to some bad trades and losses.
It’s often used as a warning – “beware of FOMO”, meaning don’t jump onto a coin’s bandwagon just because you see the green candles going crazy. Make sure that you still do your due diligence on every coin you plan to invest in and never invest what you can’t afford to lose.
What the FUD?
This one is a little harder to guess. It stands for: Fear, Uncertainty, and Doubt. It is most commonly used when a person or circumstance creates a little bit of noise that makes people unsure as to what’s about to happen. For example, “JPMorgan’s Dimon spread FUD by saying Bitcoin is a fraud that will eventually blow up”
The main difference between the two is that FOMO can be avoided. You, as a crypto trader, may get FOMO but by doing your own research, carefully examining the market, and exercising discipline, you can make better decisions that are not influenced by emotions.
FUD on the other hand is something created by someone or something else, so it’s a little harder to deal with. Again, your best bet is to stay calm, do your research, and if you’re really unsure, always HODL or stay on the sidelines until market conditions settle.
(Learn how to manage your emotions when trading crypto)
How to deal with FUD and FOMO?
One way to guard against bad trades or rash decisions is to set your stop losses at levels that you are comfortable with. You can read the academy article to learn more about setting stop losses.
You don’t have to be up to date on all the latest jargon to get into crypto and become a successful bitcoin trader. Still, knowing these terms is quite helpful if you often look to other traders for advice or want to follow what other people are talking about in the crypto world.
If you have any terms you’ve come across that you can’t wrap your head around make sure to shoot us a question on our Twitter and hopefully, we can help you a little more than Google Translate!