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Technicals

Odd lot theory

One of the popular theories in technical analysis is the belief that small investors are always wrong. This theory suggests that when there is an increase in odd lot sales, which indicates small investors selling their stock, it is actually a good opportunity to buy. This approach assumes that small investors tend to make emotional and irrational decisions, thus making their actions a reliable indicator for market trends. By understanding this theory, investors can make informed decisions and potentially benefit from the actions of small investors.

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