To fade involves deliberately trading against the trend by dumping large amounts of liquidity into a market. In a bullish market, it is used to momentarily cause the price to dip, triggering other traders’ stop-loss orders, which has the knock-on effect of sending the price even lower.

This offers opportunities to re-load, buying up the asset in question at a cheaper price before it goes back up. It’s essentially a strategy intended to get weak hands to exit their positions so that you can buy back in cheaper.

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