Insights into Economics and Management

The behavioral finance takes its fundamental principles from the economic theory. Behavioral finance is a novel approach in the financial markets domain. It originates due to an urgent need to overcome and deal with the outstanding issues that traditional investors face in today’s modern finance system. Thus, it is said that certain investors who do not have perfectly sensible elucidation regarding some financial situations and issues can recognize these issues better by means of certain financial models. Likewise, in a number of behavioral finance models, investors are known to be unable to bring an upto-date of their beliefs in the correct manner. The nature of behavioral models normally has integrated perceptions from psychology with the neoclassical style of economic theory. However, other models show that investors adopt questionable choices in some cases. Thus, this paper introduces the behavioral finance, describes the background and the aims and objectives of the study, and it introduces the standards of the behavioral finance. Investors in Egypt can make use of the findings that show that anchoring match their finance behavior. A period of three consecutive days of stock market past performance is considered as a trigger that shifts the investors’ perception regarding market trend.