This chapter presents an understanding of how human psychology impacts behavior in financial matters and how that behavior affects the markets. Heuristics are the ways in which one arrives at decisions and the thought processes behind our internal logic. Heuristics are common to large numbers of people and thus govern the way we all think and act as a group. Heuristics that relate to financial decisions affect the way we as market participants perform our role on the markets. Investors prefer certainty to ambiguity in possible returns. Anchoring is a common and very important behavioral phenomenon. It occurs when people place a mental stake in the ground on a reference point that forms the basis of quantitative estimates such as stock prices. Anchoring can be an important factor in price negotiations.