The term "weak hands" comes from the traditional investment world and typically refers to investors or traders who are driven by emotions such as fear or uncertainty. They usually tend to quickly abandon their trading positions and sell assets on almost any news or event that is deemed detrimental. Such individuals do not believe in the long-term growth of their investments and are easily swayed by ordinary price fluctuations.
Meanwhile, the term is also often used in the cryptocurrency sector and has a rather negative connotation in both the foreign exchange and crypto markets. The "futures markets" are a small exception. Here, the term "weak hands" basically has no pejorative meaning, but merely describes people who have no deeper interest in the underlying asset and act more as price speculators than as investors.
The biggest problem of "weak hands" is the great influence of general sentiment on their personal investment decisions. For example, when a bear market phase is coming to an end, the news is usually at its worst. The losses for those who held on to their coins when the market fell are at their highest and fear becomes the driving force in people's minds. While smart minds realize that the current sentiment is not in line with reality and a good time to buy is approaching, the "weak hands" usually only see so-called FUD (Fear, Uncertainty, Doubt). It is also the case that "weak hands" have not bought an asset out of a fundamental interest in it, but have included it in their portfolio without any detailed knowledge of its characteristics. This factor ultimately means that the people themselves have no arguments at hand that could counteract the FUD. In most cases, the result is that they sell their positions at an unfavorable time. This results in either much lower profits - or in the worst case: realized losses.
"Weak hands" tend to stick to a set of "rules" that make their trading activities predictable. In a very small and therefore easily manipulated market like the crypto market, weak hands can be easily "shaken out" by strong hands through artificially created, strong market price fluctuations. The net result is that they end up buying at the highs and selling at the lows - a surefire way to lose money.
To conclude this article, I would like to give you a few brief tips that can help you avoid becoming a "weak hand" yourself and how you are likely to make more profits or fewer losses in the long term:
Are you a weak or strong hand? Have you ever sold at a loss? Let us know your opinion/experience in our free Blocktrainer forum.
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