Fear of missing out
Why do traders buy after a market has already risen, and what does that late buying typically cost them?
In plain words
Fear of missing out is the urge to buy because others have recently profited and the price has already moved a long way. The trade arrives after the gain, so the buyer's entry price is near the top of the move rather than the start of it.
Why it matters
Late entries carry worse prices and leave less room before a reversal erases the position. Volume swelling as a rally matures, and prices closing near the top of their range, are two measurable traces of that arrival; neither predicts a turn on its own.
In a real week: ETH, week of 10 April 2023
In the week of 10 April 2023, ETH rose 13.97%, its 87th percentile among 269 weeks, with dollar volume of 7.35 billion, 1.17 times its prior 12-week average. It closed in the upper third of its range at a 92.3 close location, and ETH beat BTC by 6.98 percentage points. The high arrived on Sunday 16 April at 19:00 UTC, near the week's end.
A common mistake
Treating strong late-week momentum as a fresh opportunity without noting how much of the move has already been spent and how far the entry sits from the week's low.