My DD started doing this about a month ago too (she is nearly 2). I am so glad I'm not the only one with a strange child I think it is very normal and my DD didn't even start it in reaction to anything, she just discovered she could do it one day and keeps on doing it.

She doesn't just use her hand though, she also uses eating utensils and she thinks it is soooo funny. Everytime she does it she looks around for someone to give her attention. We are just ignoring the bahaviour and hope it stops. I do take spoons away from her if she is using those to make herself gag, but apart from that, I just try to distract her and don't pay any attention to the behaviour.