Fading is a kind of Forex trading technique which is used by traders who assume a rapid upward movement. These traders also takes a short position on which expecting a possible reversal in prices. This trading technique is sometimes very risky as traders have to go against the trend while carrying out a Forex trading. This is a risky trading strategy as it can reduce the probability of profitability.
This trading technique can be very profitable in the limited market range as strong resistance level can be easily established. This also decreases the probability of future resistance and reversals at that price level.