What do individual traders of TAIEX futures learn from their trading activities?

Abstract

This study analyzes what individual traders who engage in TAIEX futures learn from their trading with data covering all TAEIX futures contracts between January 2004 and December 2008. We use a semi-parametric regression model and a Cox proportional hazard rate model for data analysis and find that losing traders stop trading actively after realizing their poor ability of trading, thus supporting the rational learning model. However, traders’ performance does not improve until they have enough trading experience. This finding indicates that traders have limited rationality and that the speed of learning from trading is irritatingly slow.