The traditional finance sector, also known as conventional finance, and the more recent field of behavioral finance comprise the two main segments of the financial market. In the beginning, traditional finance theories—like Harry Markowitz's Model and the Efficient Market Hypothesis—that presuppose investor rationality were the main focus in the financial markets. But because of their implausible premises, these traditional theories were questioned in the 1990s. The global nature of today's financial markets is shaped by a multitude of factors, such as domestic economic processes, information dissemination, institutional and political constraints. The most important ones are people's opinions and responses among these. Examining the transition from traditional finance theories to behavioral finance and emphasizing the value of behavioral finance are the goals of this research paper.