Published On : 11/22/2023

Psychological Fortitude in Financial Markets: Lia Holmgren’s Emotion-Centric Trading Curriculum

Lia Holmgren

Trading the financial markets is much like an emotional rollercoaster. Traders can become overwhelmed by a number of feelings, from fear and euphoria to capitulation and depression,  which may lead to impulsive and irrational decision-making. Being aware of emotions in trading, how they affect one’s choices, and keeping them under control has thus become critical in achieving success amidst a volatile market.

With an MS degree in Negotiation and Conflict Resolution from Columbia University as well as a biopsychology BS from Touro University, investor and trading coach Lia Holmgren has brought a unique perspective to the trading world.

Holmgren understands and embraces the complexities of the human mind and the impact emotions can have during the process of any decision-making. She has built a prominent online cohort that teaches traders how to leverage their emotions as power to succeed by managing them, to begin with.

“Control over one’s feelings is a trader’s greatest asset. It allows you to navigate unpredictable markets with clarity and confidence and make decisions that perfectly align with your financial goals,” she says.

Although it’s often perceived as a purely analytical activity, trading is profoundly influenced by emotions. Holmgren points out that trading psychology has long recognized the impact emotional biases have on decision-making processes. Fear, excitement, greed, and overconfidence, she says, are the most common feelings traders experience, and effectively managing them opens the door to prosperity.

Fear of missing out, in particular, is a powerful driver that can cause traders to make hasty and frequently costly decisions.

“If you recognize this feeling, if you take a step back and re-evaluate the situation, you can make better investments that align with your strategies and your portfolio and help you avoid being swept away by market frenzy,” Holmgren says.

Holmgren also highlights the importance of understanding and calculating risk. A common pitfall for many traders is knowing when to exit a trade, which frequently leads to panic when stocks go down. This is why Holmgren has placed special emphasis on helping individuals with adequate risk management and knowing when and why to leave a trade without giving in to anxiety.

Through her online curriculum, she engages with her students, asking them about their portfolios and how a particular trade suits them. “I advise against entering and exiting a position without carefully considering it beforehand. If there’s a large sum of money involved, this can lead to huge losses.”

Holmgren insists there’s a more balanced method here. Rather than dropping out altogether, she suggests people have the maximal amount they’re willing to lose on a trade and size their positions based on this number. This strategy will leave a trader with no bad surprises.

In this context, Holmgren has also dedicated her career to teaching people how to generate more income from their existing holdings through options trading. The essence of her strategy is to maximize the potential of the assets one currently has at one’s disposal and not just hold on to them passively. This way, the investment journey can be much more rewarding.

On the other hand, greed is especially risky since it can distort one’s perceptions of risk and gain. Holmgren believes there are two types of greed – greed to keep the money one has earned so far and one to make more. While this emotion can bolster motivation, driving people to succeed, it has a considerable downside.

“It makes traders hang on to their positions for too long, thinking you can get every penny out of any trade,” she says. “People are often blinded by this idea that they can get rich quickly, but a successful trader is someone who understands failure is a part of the journey. It’s how you treat this failure, what lessons you’ve learned from it, and how you apply in not repeating them is what truly matters.”

To help traders avoid these common pitfalls, Holmgren provides tools and strategies for managing feelings. She teaches people how to enhance their self-awareness and practice emotional regulation.

The benefits of this type of awareness are plentiful. Traders can avoid common mistakes like doubling down on a losing investment and overleveraging. This emotional intelligence enables a trader to trust in their abilities and make decisions with greater clarity.

Holmgren’s holistic approach undeniably fosters better decision-making and long-term success by providing a more nuanced understanding of trading. But her ultimate aim goes beyond just creating successful traders.

Her objective is to nurture financial independence and resilience—especially among women who are frequently too intimidated to enter this male-dominated sector—and ensure individuals are equipped with the skills and confidence to take charge of their financial futures.

As she says, “I’m passionate about creating a space in the trading world where people feel empowered. It’s not just about making successful trades, but about building confidence.”

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.