Fade
Definition of 'Fade'1. A contrarian investment strategy used to trade against the prevailing trend. "Fading the market" is typically very high risk, requiring the trader to have a high risk tolerance. A fade trader would sell when a price is rising and buy when it's falling. Also known as "fading".2. In a dealer market, it is the failure of a dealer to honor a quote when a customer or another dealer wants to trade. |
|
Investopedia explains 'Fade'1. An example of fading would include buying on a dip in price and selling when the price rallies. Often it's a rather volatile strategy, but one which offers the potential for significant short-term gains. It requires little in the way of complicated analysis but the risk that trend continues is always present.2. For example, if a better bid is posted on another exchange for a security and a market maker is unwilling or unable to match it for a client order, the market maker may offer to trade with the other market maker (with the better price). The market maker offering the better price must accept the offer and trade at the price offered or adjust the bid price. |
Related Definitions
Articles Of Interest
-
Forex: Finding Your Trading Style
Determine your own trading style, and the versatile currency market will accommodate it. -
Day Trading Strategies For Beginners
From picking the right type of stock to setting stop-losses, learn how to trade wisely. -
How To Use The Forex Pure Fade Trade
This intraday strategy picks tops and bottoms based on a clear recovery following an extreme move. -
How To Place Orders With A Forex Broker
Learn how to set each type of stop and limit when trading currencies. -
Peak-and-Trough Analysis
Prices never move in straight lines, so it's time to learn about this powerful trend-following technique. -
A Primer On The MACD
Learn to trade in the direction of short-term momentum. -
When To Short A Stock
Learn how to make money off failing shares. -
A Top-Down Approach To Investing
Use a global view to determine which stocks belong in your portfolio. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
Market Summary for September 6, 2013
The major U.S. indices moved lower this week, after a lackluster jobs report sent shares lower on Friday morning.
Free Annual Reports