Fading Trading: When Is it Worth Going Against the Trend?
Trend following is one of the most popular day trading strategies in the world. It involves buying and holding an asset whose price is rising and short-selling an asset whose price is retreating. The strategy is often emphasised by statements like “the trend is your friend” and “don’t catch a falling knife”. The latter statement means that you should not attempt to buy an asset that is crashing. However, some strategies claim the opposite, such as the one we will explore right now: fading. In this article, we will look at the concept of fading a trend and how to use it well. The fading strategy is one that is the exact opposite of trend-following. It is a contrarian strategy where traders seek to buy an asset whose price is falling and short one whose price is rising. For example, if a stock rises from $10 to $15 within a short period, the fading strategy calls for placing a short trade with expectations that it will start to pull back. In most cases, traders who apply the trend follow
Fading Trading: When Is it Worth Going Against the Trend? Skip to content Sign Up Today Fading Trading: When Is it Worth Going Against the Trend? Real Trading™ Staff November 23, 2022 Trend following is one of the most popular day trading strategies in the world. It involves buying and holding an asset whose price is rising and short-selling an asset whose price is retreating. The strategy is often emphasised by statements like “ the trend is your friend ” and “ don’t catch a falling knife ”. The latter statement means that you should not attempt to buy an asset that is crashing . However, som
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