Paper hands is used as an insult in meme-stock and crypto communities for people who sell early. In practice, taking a loss at a planned stop-loss is not weakness, and the people mocking it are often the ones who become bagholders.
The term matters because social pressure to hold can override a trading-plan.
Example: a trader sells a stock at a 15% gain after it doubled and is called paper hands online. The stock falls 60% the following month.
Related: diamond-hands, bagholder, stop-loss, fomo