The term FUD stands for “Fear, Uncertainty, and Doubt.” It can be used as both a noun and verb:
- FUD (noun): a term used by the crypto community to quickly describe and discredit the bearish sentiment that surrounds coins that have dropped in price.
- FUD (verb): an approach to influence the bias of traders by spreading pessimistic, misleading, or false information.
Therefore, ‘FUD’ can be used as both a way to discredit overly bearish traders or influence traders by spreading false information.
For example, the statement “Bitcoin is garbage, old tech” can be considered FUD, as the motivation behind this statement is either to influence investors to sell or to spread false information. Both motivations are enough to discredit the statement.
When FUD (Fear, Uncertainty, and Doubt) spreads across markets, the traders most affected will start to sell their assets even at a loss. Therefore, to remain profitable investors must maintain an understanding of how fear can spread and influence perceptions.
How To Control FUD
All humans have emotions which can lead to poor decision making. As profitable traders, we have to obtain skills to control our emotions and remain unbiased. The following tips can help one to control irrational thinking:
- Keep a personal trading log or journal.
- Try to acquire the habit of self-analysis.
- Notice the signs of FUD, and do not pay attention to misleading and fake news.
- Alternatively, notice signs of ‘moonboys’, or novice investors who believe their coin will inevitably goes parabolic.
- Set clear goals and trade when you are confident.
- DO NOT take any trade base on fear.
- Have a stop loss in your positions.
Although most people think it is simple to trade and make money in the market, successful trading requires strategy. Crypto traders should be prepared and practice self-control, as emotions are the foremost factor that cause loss. Remember, professional traders only trade their setups, and they wait for these set-ups to occur.