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Alison Heyerdahl
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Alison Heyerdahl
Edited by
Alison Heyerdahl
Head of Content

Alison Heyerdahl is the Head of Content at FxScouts and a financial writer with extensive experience in Forex trading, broker analysis, and market research. She has reviewed 100+ brokers, publishes weekly YouTube trading videos, and co-hosts the “Let’s Talk Forex” podcast to help traders make informed, safe decisions.

Learn more about Alison Heyerdahl
Author
Author
Chris Cammack
Partner Manager and Financial Writer

Chris Cammack is the Partner Manager and a financial writer at FxScouts. Chris builds and maintains our relationships with our partners to provide our users with the best Forex trading experience.

Learn more about Chris Cammack

Fade a Move Strategy

Reading time: 3 min | Intermediate | Trading Strategy

Fading a move is the unorthodox strategy of trading against the prevailing trend of the market, and can be very profitable with the right market conditions.

Fade a Move Strategy

Using this strategy, a trader will sell expecting the momentum to fade away while in an uptrend, and a trader will buy with the expectation that the move will fade away and reverse while the market is in a downtrend.

There are two main components of a Fade a Move Strategy.

Don't Fade Strong Market Trends

Fading strong market trends is a losing game and a receipt for disaster. Fading a trend successfully is not easy because trends can continue to stay in motion for long periods.

Fade Sudden and Explosive Spikes

What we want to fade out are sudden or explosive moves or spikes in price that are unsustainable and lack the momentum to continue.

How Fade A Move Strategy Works

Most of these spikes in price happen on an intraday basis, so using a day trading strategy to fade spikes in price is best.  Fading requires having a contrarian approach, and many of the most prominent hedge fund managers promote themselves as being contrarian traders.

Fade a Move Conditions & Strategy

Condition 1

The primary assumption behind fading strategies is either that the trend is overbought/oversold or the move lacks the momentum to continue.

Consolidating or ranging market conditions are the ideal trading environment to fade spikes in price. First, a trader needs to find a ranging market. Luckily, the market spends most of the time in ranging conditions, which means that this trading strategy can be used frequently.

GBP/USD trading range right before the London session opening bell

GBP/USD trading range right before the London session opening bell

The above chart highlights the GBP/USD trading range right before the London session opening bell. For this strategy to work, a trader does not need to guess in which direction the market will spike, and instead only watch the market move naturally and react afterwards.

Condition 2

The second condition to be satisfied to fade a move successfully is that the spike in price needs to happen from significant technical level (support/resistance; swing high/low; psychological numbers).

In our case, the GBP/USD spikes down to the support level and quickly start fading away. You can either buy right away when the support level is hit or you can use a more conservative entry strategy as follows:

  1. Wait for the market to start fading and pulling away from the support level.
  2. Mark the height of the candle on your chart that started the sell-off.
  3. Place a buy limit order to go long once that high is broken.

Keep Risk Contained

When fading a move, keep your risk contained to prevent potential losses. Don’t forget to use a protective stop loss to minimise the possible loss in case the trade goes wrong.

  1. After your order gets triggered, place your protective stop loss below the support level. You can add a buffer of 5-10 pips to protect against possible false breakouts.
  2. The next thing you need to establish is an ideal place to take profits, which should always be at least two or three times more than your stop loss.

Conclusion

Fade trading means waiting for the initial spike in price and only trade what happens after it. The first spike is usually a knee-jerk reaction that is designed to fool many traders into jumping into the market in the wrong direction.

Even though fade trading might seem to be risky because you’re trading against the trend, it can be extremely profitable if appropriately used.  This is because the market spends most of the time consolidating which is where most of the spikes in price happen.

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Meet the Experts Behind Our Unbiased Reviews

Chris Cammack

Partner Manager and Financial Writer

Chris Cammack
Chris Cammack is partner manager and senior financial writer at FxScouts, specialising in broker relations and forex market analysis. As the former Head of Content (2019–2024), he set editorial standards for all content published at FxScouts, including broker reviews, broker comparison pages and education. With over a decade of experience in editorial management and partner relations, Chris builds and maintains our relationships with our partners to provide the best Forex trading experience for our users. He also co-hosts the “Let’s Talk Forex” podcast with Alison Heyerdahl, where he explores trading strategies, industry news, and macroeconomic trends to help traders navigate the markets with confidence.

Alison Heyerdahl

Head of Content

Alison Heyerdahl
Alison Heyerdahl is the Head of Content at FxScouts and an experienced financial writer with extensive hands-on experience in the Forex trading industry. She specialises in Forex trading, broker analysis, and market research, with a focus on helping traders navigate the complex world of online trading safely and confidently. Alison has tested and reviewed more than 100 Forex brokers, assessing everything from regulatory status and trading conditions to platform features and customer support. Her goal is to provide honest, detailed, and practical insights that traders can rely on when choosing a broker. She’s also produced more than 100 educational videos for the FxScouts YouTube channel, where she explains trading concepts in a clear, accessible way. As the co-host of the “Let’s Talk Forex” podcast, Alison shares expert commentary on broker reliability, trading strategies, and market developments—always with a focus on transparency and trader protection.

Ida Hermansen

Financial Writer

Ida Hermansen
Ida is a financial writer with a passion for cryptocurrencies, blockchain networks, and Forex trading. A dedicated crypto trader, she developed a deep interest in Forex technical analysis and price action, continually expanding her expertise in market trends and trading strategies. With a background in digital marketing, SEO, and content strategy, Ida combines her analytical skills with clear, engaging writing to help traders navigate the ever-evolving financial markets. She stays up to date with the latest Forex and crypto developments, researching the best trading environments for new and experienced traders alike.

Stefan de Clerk

Financial Writer

Stefan de Clerk
Stefan is a financial writer and Forex trading enthusiast with over a decade of experience creating in-depth content on finance and technology. His deep interest in geopolitical events, big data, and market sentiment fuels his passion for analyzing how global factors shape financial markets. With a background in marketing and financial research, Stefan believes that Forex trading offers the best insight into the pulse of the world economy. Committed to delivering well-researched, unbiased, and objective information, he helps traders navigate the markets with clarity and confidence.
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