The Mystery of Market Movements: An Archetypal Approach to Investment Forecasting and Modelling

Chapter 1Psychology: A Primer

Human reflections on psychology are as old as mankind; however, these reflections evolved into a more structured form once our ancestors could contextualise them as either part of religion, philosophy, or medicine. The oldest surviving document that can be linked to psychology as an abstract idea—a scripture prescribing medical remedies for diseases induced by demons—comes from ancient Egypt.¹ Later, the Greek philosopher Aristotle (384 BC–322 BC) examined various psychological abstractions from a philosophical perspective in his treatise De Anima (On the Soul).² His Greek contemporary Plato (427 BC–347 BC) introduced the notion of the soul as a separate entity from the body, a concept that remains the subject of debate to this day. And the language of Aristotle and Plato gave us the word psychology, its root being the ancient Greek for “the study of the soul.”³

In Western civilisation up to the mid-1800s, the main exercise of psychology was in the study of the soul from a Christian theological perspective, its relationship to the human body, and its fate in the afterlife.⁴ It was not until the 1870s that psychology became a standalone academic discipline, when the German physician Wilhelm Wundt (1832–1920) developed scientific principles for the study of the mind. Wundt set up a laboratory to study the mind through a range of empirical tests, such as by timing responses to various stimuli. In 1874, he published the first textbook on psychology, ...