The definition of Trauma in psychology is not currently standardised, and different experts in the field define psychological trauma in a variety of different ways.
Pearlman & Saakvitne, 1995, p. 60, cites that Psychological trauma is the unique individual experience of an event or enduring conditions, in which the individual’s ability to integrate his/her emotional experience is overwhelmed, or the individual experiences (subjectively) a threat to life, bodily integrity, or sanity.

So we can draw the conclusion from this definition, that psychological trauma occurs when an individual is exposed to a situation (or many situations) that trigger a sense of overwhelm. This may be initially perceived as fearing for their life or life as they know it, or fearing the serious potentiality of psychosis or mutilation. This “trauma” is then stored in the memory centre of the brain, and processed as a belief in various other parts of the brain to execute various emotions attached to this experience. Additionally, this trauma becomes imprinted within the biology of the individual’s cells, becoming a cellular memory.

Unless this cellular coding is undone or re-coded, this trauma has the potential to be retriggered and/or cause physiological issues within the body long after the actual traiumatic event has passed.