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Weak hands

Holders who sell easily under pressure, usually because they are oversized, late, or without a thesis.

The term is used dismissively and describes something real. A holder with no defined reason and too much size will sell on the first serious move against them, regardless of what happens afterwards.

Weakness is a function of position and preparation, not character. The same trader is weak-handed at ten times normal size and perfectly steady at normal size. That is the useful reading: if you keep getting shaken out, the fix is usually sizing and a written invalidation rather than resolve. See paper-hands and strong-hands.

Related: paper-hands, strong-hands, shakeout, position-sizing

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

How a position size is worked outAccount size, risk per trade and stop distance feed into one box giving the number of shares.ACCOUNT SIZE$25,000your capitalRISK PER TRADE1%of the accountSTOP DISTANCE$0.50entry to stopPOSITION SIZE500 sharesrisk budget: $25,000 × 1% = $250position size: $250 ÷ $0.50 = 500 shares
Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.

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