It is set to be an intense battle with West Brom in the first match at Molineux with fans in 14 years.
Wolves are eager for local bragging rights by securing a famous win and Peixoto is trying to find the right balance in the mentality of his players.
“It’s a hard task, a difficult task,” he said when asked about taking the right amount of energy from the atmosphere.
“I want the players to feel the derby. It’s important to feel, to go to play with passion, but I want the players to have the right mental stability in this kind of game.
“I think it’s important to play with passion but with the head also. Not lose our organisation, not lose our capacity to play.
“I have to feel the supporters, the environment on the pitch, but have the capacity when we start to play, we play in our way.”
He added: “We have our collective behaviours, and we have the individual behaviours, and I know the players better now and I know when the players stay in the right mental stability.
“I know with the collective behaviours in the games, in the moments of the game when the players are more emotional or playing more with the head, I know that and try to talk with them, just to put them in the right place to play a derby like we have to play with the passion but with the brains also.”
Peixoto is a level-headed and measured individual, who is keen for his players to emulate that approach on Sunday.
For him, his character also played a part in his playing career, as he reflects on the attitude needed for a derby game.
“I’m a quiet guy,” Peixoto said.
“I got a red card two or three times in all my career. I play with mental stability, but I don’t like to lose.
“I’m very, very competitive. I’m lucky, I played in good teams, teams to win a lot of trophies. I’m lucky with that.
“I’m lucky with the teams I play because I have the right mentality, a competitive mentality. I play a lot of derbies and never see a red card, but I think it’s important to feel this kind of environment in this game.”