The financial market is affected by the behavioral and psychological factors more than the fundamental and fundamental factors. The inapplicability of the basic finance and the market inefficiency in a realistic financial world which had been surprising the financial practitioners as well as academia. The financial crisis of the world starting from the global depression of 1930’s, Asian onset of seventies and subprime crisis in 2008, and now the euro zone financial imbroglio; all can be explained better with the help of psychological biases of the financial practitioners, bankers as well as policy makers. This research paper attempts to study behavioral factors for investor decision making in stock market with specific focus on Herding and overconfidence. It was found that both the biases are significant for investment decision making