For investors who like to visit crypto world forums such as Reddit, you will definitely be familiar with the terms used. This is usually used to describe market conditions or simply to ridicule novice investors who exaggerate when discussing crypto assets in a forum. One term that is widely used to describe investors with a high level of anxiety in facing market movements is paper hand. Apart from that, there is also the term diamond hand as the opposite of paper hand. So, what exactly is meant by the terms paper hand and diamond hand in the crypto world? Come on, see the following explanation.
What is a Paper Hand?
Basically, the term paper hand is used to describe traders and investors who are too worried about their trading and investment activities. Usually they will rush to sell when their assets start to fall so they can avoid continued losses. In fact, crypto asset price movements are volatile or have a fast movement phase. The paper hand itself describes investors who do not want to face risks by carrying out panic selling when signs of decline appear. The term paper means paper because paper can be folded quickly, thus describing the decision of investors who easily panic when downward pressure appears without giving their crypto assets a chance to reverse direction. The term paper hand itself is commonly used in crypto forums to ridicule investors with this characteristic. Therefore, when deciding to enter the crypto market, not only funds are prepared for investment, but also the mentality must be forged. By rushing to sell without any analysis, paper hand investors have clearly eliminated their potential to generate profits. In addition, the term paper hand appears in a subreddit forum called r/WallStreetBets which is used to describe this type of investor. subreddit on Reddit. r/WallStreetBets is known for creating terms that become memes. He even popularized the term FOMO or fear of missing out.
Example of Paper Hand
As already mentioned, the meaning of paper hand is a type of investor or trader who always panics when faced with market conditions. You can understand this term more deeply through examples. An example that illustrates a paper hand investor is when an investor buys a crypto asset at a certain price, after purchasing the asset there is a decrease of 2 percent. Without thinking that this condition is only temporary, paper hand investors will immediately sell for fear of falling further, thereby increasing their losses. In fact, by carrying out analysis and being a little patient, the price of these crypto assets can rise again along with market movements. Hence, why they will not be able to make any profit at all if they immediately decide to sell assets when they weaken. Apart from that, continuous cut losses will certainly increase the amount of losses experienced due to admin fees that will be charged every time a sale is carried out.
What is a Diamond Hand
Apart from the term paper hand used by investors in forums, there is also the term diamond hand which has the opposite meaning of paper hand. Where, the diamond hand is used to describe an investor or trader who is confident in maintaining their crypto assets. Even though the current market conditions continue to decline, they still don't care. A diamond hand will not hide under pressure by selling to secure their funds. Usually you can find diamond hand investors in old investors and traders who really understand market conditions well.
Difference between Diamond Hand and Paper Hand
From the explanation of the meaning of the two terms paper hand and diamond hand, of course you can find out what the differences are. Where, it could be said that these two types of investors are opposites. Paper hand investors are always worried about losing their investment portfolio. The action of minimizing the losses they experience seems to result in the loss of the potential to gain large profits. Meanwhile, in contrast to the diamond hand type as an investor who can be said to be stubborn until he is able to find a way to gain profit from the investment he makes. Where, this type of investor seems to apply traditional investment methods, namely buying and saving without paying attention to current market movements. This method can certainly be used for positive things because you are patient and don't panic about certain movements. However, it should also be noted that this type of investor could increase their losses because they do not take actions that can minimize losses. If combined with other methods or methods, this type of investor can become a successful investor.
