Fade

To fade a market means to trade in the opposite direction of the prevailing trend or recent price movement.

For example, if a stock has been rising and you expect it to reverse course, you might “fade the rally” by short selling the stock.

Similarly, if a stock has been falling and you expect it to bounce back, you might “fade the drop” by buying it.

Fading is often considered a contrarian strategy and can be risky, as it involves betting against the current momentum. Traders who employ this strategy usually look for signs of market exhaustion or reversal patterns to time their trades.