Home » Fading

Fading

« Back to Glossary Index

Last Updated on: 2nd February 2021, 04:13 am

Fading is a trading technique in which a trader assumes that a rapid upward movement is overdone and takes a short position on a possible reversal.

This technique can be very risky in trending markets because going against a strong trend reduces the probability of profitability.

This technique can be potentially rewarding in range bound markets because a strong resistance level has been established, increasing the probability of future resistance and reversals at that level.

Related
Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

Kathy Lien

Kathy Lien is an expert in global currencies, author, and Managing Director of BK Asset Management. For retail FX traders back Read more

European Parliament

The European Parliament is the European Union’s law-making body. It is directly elected by EU voters every 5 years. It is a Read more

Open Position

An active trade that has yet to be closed.

« Back to Glossary Index