What Is Diamond Hands?
Diamond hands refer to someone that can hold their positions to the end despite the headwinds.
When you have diamond hands, you have high-risk tolerance and don’t quickly exit your positions. The primary goal of someone with diamond hands is to hold a position until they achieve your investment goals.
Likened to diamonds with unyielding strength, traders with diamond hands are often determined to hold their position regardless of what’s happening in the market. Simply put, these traders don’t cave under pressure. As mentioned, diamond hands refer to anyone who doesn’t sell their position even during significant market swings. Instead, they hold until they get the profits they want. If you’ve got diamond hands, you won’t mind what price action may bring to the assets you own. Your primary goal is to hold your position until you achieve your investment goal despite the potential risks and losses.
The strategy is only suitable for those with high endurance. “Diamond hands” is a trading strategy suited for long-term investors, while paper hands are for swing traders and day traders.
Diamond hand traders focus on holding their positions until the end even if there are headwinds because they’re willing to take risks. Paper hand traders, on the other hand, exit positions when they see any sign of danger.
With more trading forums proliferating, traders and investors will likely come up with more investment terms. As such, you should make an effort to stay up-to-date with the latest investment terms and trends.
Diamond Hands Example
The phrase “headwind” is used in finance to indicate situations that stifle or obstruct growth, and it has the same meaning for repercussions on economies, sectors, and individual businesses. Headwinds are the elements that cause the economy or the firm to lose value or expand slowly. So, if you plan to focus on your position to the finish, regardless of headwinds, or if you plan to extend your position, such as by purchasing more tokens or stock shares, you have diamond hands. It implies disregarding market troughs and volatility and maintaining your position – a sign that you aren’t succumbing to panic.« Back to Glossary Index