Paper Hands – Meaning & Where does it come from?

Trading concepts

In this article, we are going to share with you the paper hands meaning. If you are in the world of trading, you would have probably heard about paper hands and diamond hands. Have you ever wondered what these terms mean and where did they come from? Let’s dive deep to find out. 

Paper hands meaning

Paper hands meaning is very simple. Paper hands are traders who don’t hold onto their assets. Diamond hands are their counterparts who hold on to their assets for the long term. 

You can better understand the paper hands meaning by looking at the comparison between paper hands and diamond hands. Diamond hands are strong traders who have supreme trust in the assets they hold. Market fluctuations cannot ever shake their firm belief in their assets. Contrarily, paper hands are not strong enough and are also risk averse. They don’t prefer to hold on to their assets for long and sell them after a small increase in prices. 

So, we can say that paper hands are traders who don’t see long-term prospects of financial assets. They look at financial markets on a daily, even hourly basis. Holding assets for a long time is not a viable strategy for them. Paper hands are right perhaps. Holding assets for a long time doesn’t guarantee profits in all cases. Sometimes, even companies with huge potential end up bankrupt. However, they always annoy most diamond hands who prefer holding assets for a long time. 

Where does the term paper hand come from?

r/WallStreetBets subreddit on the Reddit forum coined the term paper hands. They have also coined some other terms such as FOMO. Paper hands became a popular slang word in 2021 when the r/WallStreetBets subreddit on Reddit forum was promoting meme stocks like GameStop. Traders and investors using this term trade in highly volatile markets such as cryptocurrencies. Paper hands aren’t able to withstand high volatility and sell their assets early. It annoys diamond hands and they slang paper hands for this. 

Why do paper hands annoy diamond hands?

As you know, the behavior of market participants plays a key role in determining the prices of financial instruments. When paper hands quickly sell their assets, prices generally fall. That annoys diamonds and therefore they slang paper hands and also make fun of them. You can search for emoji diamonds used to troll paper hands. However, this isn’t the right attitude. Everyone has the right to trade however he/she wants. That’s why the calm diamond hands accept this and don’t blame paper hands. 

The wrap-up

Paper hands meaning is simple. The term refers to traders who don’t hold assets for long. On the other hand, diamond hands keep their assets for a long time. Both are trading strategies. Both have advantages and disadvantages. This is a free world and everyone has the right to trade in his/her own way. However, the annoyance they cause for diamonds sometimes leads them to troll. This isn’t the right way though.

Russell Crane

Russell Crane

Russell is an Algorithmic & Technical Analyst Trader @ PatternsWizard.
His passion is to share his knowledge about TA, patterns & more. Why hope for your trading to work when you can precisely know the performance stat of every pattern?

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