# Odd Lot Theory (so also said in German, more rarely (unschön) KleinanlegerVerhaltensanpassung)

- Canonical URL: https://www.gerhardmerk.de/odd-lot-theory-so-also-said-in-german-more-rarely-unschon-kleinanlegerverhaltensanpassung
- Post ID: 589946
- Modified: 2023-07-25T21:14:33+00:00
- Language: en

## Definition

The assumption that small investors always decide emotionally and therefore act at the wrong times on the stock market - and especially when buying stocks. Therefore, if - many retail investors buy when prices are rising, this is seen as a sign of market weakness; - one should therefore sell the corresponding security as quickly as possible now. - If, however, many small investors sell when prices are falling, - then this is regarded as a signal to enter this market or this security (theory of technical analysis based on the assumption that odd-lotters [= small investors who deal in fewer than 100 shares at a time] are poorly informed and have a low risk tolerance. Small individual investors, therefore, are always wrong, and it is a good idea to trade contrary to their trading patterns; a good time to buy is when they are selling). - However, this assumption has not been empirically proven, especially since financial journalists, banks and stockbrokers - not least as a result of public pressure - generally give good advice to small investors in particular. - See stock market investors, chase winners, euphoria phase, herd behavior, hindsight, short-sightedness, milkmaid bull market, noise traders, overtrading, scalpers. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1