FOMO (Fear of Missing Out)

FOMO - FOMO is the anxious urge to enter or exit trades based on what others are doing or past misses. A trader driven by FOMO might jump into a rising market late, chasing quick profits. In code, FOMO could surface if a system is over-optimized for hot signals, effectively “buying high” after strong moves. It is often said that FOMO and regret aversion reinforce each other: during long bull runs, fear of missing gains can lead even cautious traders to ignore warning signs. Research notes that “fear of missing out on an opportunity to earn profits can drive even the most conservative… investor to ignore warning signs”. In practice, disciplined robots avoid FOMO by sticking to rules (e.g. not entering trades unless signals meet criteria).