Model of Heuristic Herding and Prospect on Investor Decision in Online Trading

Investment decisions are policies in allocating funds into profitable forms of investment that have a long-term temporal dimension, therefore choices made now need to be carefully addressed because they will have an impact down the road. Investor behavior in making investment decisions is often influenced by several psychological factors such as social factors and cognitive factors which cause investors' actions to become irrational. This research was conducted to examine how prospects, herding, and heuristics affect investment choices in online trading. This research is quantitative causal research. The subject of this research are investors who invest using online trading applications. The data analyzed is primary data. Respondents are given questionnaires as part of the data gathering process. The sample collection method is nonprobability sampling, convenience sampling. Smart PLS 4 software is utilized to do partial least squares for structural equation modeling as a data analysis tool. Our study's findings indicate that heuristic behavior, herding behavior and prospect can have significant influence on investors' decisions on online trading.