In trading, “fade” or “fading” refers to a contrarian trading strategy in which a trader positions himself against the market's prevailing trend. It entails purchasing when the market is falling and selling when the market is rising, with the expectation that the trend will reverse and the trader will profit from price movements.

Fading is based on the idea that markets tend to respect support and resistance levels, or overshoot in one direction before reversing, and by trading against the trend, the trader can profit from these hits or overreactions. Fading necessitates a contrarian mindset, as it goes against the natural tendency to trade with the trend and follow the crowd.