NEUROFINANCE: GETTING AN INSIGHT INTO THE TRADER'S MIND

Much of the academic finance theory is based on the assumption that individuals act rationally and behavioral finances treats investors’ choice based by behavioral biases. In contrast, neuro-finance (as a blending of psychology, neurology and finance) attempts to understand behavior by examining the physiological processes in the human brain when exposed to financial risk. Scientists map the mind to learn how fear and greed drive the financial markets. The paper, will briefly present why neurofinance is important and how will be able to provide in the near future a number of effective tools for improved financial decision making.