Study On The Formation Mechanism And Important Influencing Factors Of Excessive Transaction

Based on the investor's actual transaction records,this article will judge the existence of excessive trading conditions in China's A-share investors' trading behaviors in the individual;then based on the exiting research of behavioral finance and psychology field,this article will providing the in-depth analysis of the psychological mechanism which causes the investors' excessive trading behavior;since then,based on the situation,taking China's A-share market as a whole,this paper uses the econometric model such as empirical analysis,VAR regression model,and Grainger causality test methods,proving that a higher level of income in the market will cause excessive trading behaviors of investors.With respect to the bear market,this effect is more significant in the bull market conditions,in addition,this paper uses the principal components and constructs the composite indicator of investor sentiment analysis,proving that in the case of optimistic investor sentiment,investors have optimistic expectations on the broader market,so they tend to operate more frequently,causing the formation of excessive trading behavior;in the common market,when the investor sentiment is in the doldrums,investors trend to be not optimistic about the future market,which can reduce the operation,and reduce the level of excessive trading in the overall market.Therefore,the conclusion of this paper is that the market profit level and investor sentiment are both important factors which can influence the frequency of the investors' trading behaviors.