Published by Wanda Rich
Posted on November 9, 2023
5 min readLast updated: January 31, 2026
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Trading education has traditionally been a field dominated by the hard sciences. Learners analyze charts, crunch numbers, and attempt to predict future market trends using complex strategies. Still, this approach often needs to include a critical and typically overlooked psychological component of t...
Trading education has traditionally been a field dominated by the hard sciences. Learners analyze charts, crunch numbers, and attempt to predict future market trends using complex strategies. Still, this approach often needs to include a critical and typically overlooked psychological component of the trading equation.
According to author and trader Lia Holmgren, the role of emotions in trading decisions is a significant factor in a trader’s success or failure. She highlights that the market is essentially designed to take one’s money, which becomes apparent when it behaves contrary to common intuition.
“When you see a dip, your instinct tells you it’s dangerous, because the stocks are falling, and most people won’t touch them. But when the market feels safe, and stocks are making new highs, people tend to enter the trades, when it is actually a time to take a step back and evaluate,” Holmgren comments. “This approach requires a deep understanding of the psychological indicators represented in the trading charts. If you can crack that code, you can decipher the collective behavior of market participants.”
By doing so, she adds, one can better anticipate market movements and make well-informed decisions. But, while this approach feels counterintuitive at first glance, it’s precisely the method that Holmgren has meticulously implemented into her trading strategies – and a method she has endeavored to impart to her students.
Long recognized as a prominent intimacy and relationship coach, Holmgren, who is New York-based, has certainly brought a unique perspective to the world of trading. With an MS in Negotiation and Conflict Resolution from Columbia University and a BS in biopsychology from Touro University, she was able to utilize her distinct educational background to transition into a full-time trader and a trading coach—a decision she made during the COVID-19 pandemic.
As she navigated the volatile markets, Holmgren quickly realized the crucial role emotions played in her trading decisions. This realization not only led her to blend her psychological expertise with her newfound passion for trading but also inspired her to use her online platform to help others build confidence around trading.
“Emotions aren’t the enemy of rational trading. On the contrary, when understood and managed correctly, they can be a powerful ally,” Holmgren explains. “My mission is to help traders harness their emotions to make smarter, more profitable trading decisions.”
Fear of missing out (FOMO), greed, overconfidence – these are the emotions that Holmgren has placed special emphasis on through her trading cohort. The curriculum she’s designed dives deeply into these complex emotions by dissecting their subtle nature and their impact on a trader’s psyche. Holmgren emphasizes that understanding and taking control of your own emotions is the first step toward success.
“Fear of missing out is a potent emotion that can drive traders to jump onto the bandwagon. This often leads to hasty and, most importantly, costly decisions,” she shares. “But if you recognize this feeling, if you pause and reflect, you can make better decisions that align well with your strategies instead of getting swayed by market frenzy.”
In this sense, Holmgren has also spotlighted the importance of understanding and calculating the risks involved in trading activities. As she points out, a common pitfall for many traders is not knowing when to exit a trade, which often leads to panic when a stock takes a downturn, which results in substantial losses.
Holmgren’s focus is on assisting individuals in effectively managing their risks while grasping how to strategically and comfortably exit a trade to minimize losses.
“I engage people with questions regarding how a particular trade aligns with their portfolio, and I advise against hastily entering a position without a plan, which could potentially be a devastating trade, especially if it involves a large sum of money,” she says. “There’s a more balanced approach. Instead of rapidly entering and exiting positions, one can take a calculated trade with entry and exit plan to mitigate loss.”
Similarly, Holmgren warns greed can cloud judgment, distorting perceptions of risk and reward. She believes there are two types of greed: one to keep the money you’ve earned and the other to make more of it. It’s a motivational emotion, for sure, that drives people to do better and succeed – but it has a considerable drawback.
“Greed makes investors hang on too long to their investments. You want to get every penny out of every trade, which can lead to loss rather than gain,” she explains. “It can also make you blind and make you take on risky investments, thinking you can get rich quick.”
The best way to manage this feeling is to have a definite trading plan and stick to it. More importantly, Holmgren reminds us that failure is inevitable but that it shouldn’t be a deterrent but rather a source of motivation to re-evaluate one’s strategies and do better going forward.
If one can take control over one’s emotions, balance ambition with caution, and learn to analyze the psychology behind the market’s ups and downs, traders can set themselves up for long-term success.
As Holmgren says, “The market will tell you everything if you know how to listen. But, to be able to listen to it, you need to quiet your emotional noise first. Mastering this isn’t just about profitable trades, but about becoming a more balanced individual in every aspect of life.”
Emotional intelligence refers to the ability to recognize, understand, and manage our own emotions and the emotions of others, which can significantly impact decision-making in trading.
Risk management involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events in trading.
A trading strategy is a systematic plan that a trader follows to make decisions about buying and selling assets, often based on technical analysis and market conditions.
A trading platform is software that allows investors to buy and sell financial securities, providing tools for analysis, order execution, and account management.
Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, and balancing risk against performance.
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