Trading patterns in the TAIEX futures markets: Information- or behavioral-based trades?

This study investigates the relation between trading patterns and performance in the TAIEX futures market. The research shows that individual investors are poor market timers and earn negative returns; institutional investors have success in timing the market and their trades make positive returns. Individual trading activity is more aggressive in terms of a higher proportion of the market order and a shorter holding period for a round-trip trade. Individual trading is also more motivated by behavioral bias, like overconfidence and disposition effect. Institutional investors exhibit significant overconfidence-based trading when opening extremely small or relatively large positions.