Fade refers to trading against strong market momentum. This is the strategy of Market Makers and veteran Traders, but a death trap for beginners who don't understand the mechanics
🔸 Why do Whales Short when price is pumping hard?
When price moves parabolic (vertical), the retail crowd is in extreme FOMO, placing Market Buy orders regardless of price.
This massive demand creates abundant Buy Liquidity.
Whales need this liquidity to fill their massive Sell (Short) orders without crashing the price immediately. They Sell into strength.
🔸 Mandatory Fade Checklist:
Price must move extremely fast, with consecutive long green candles, detaching far from Moving Averages (MA). This is an Overextended state.
Price must hit a hard Resistance zone on the Weekly or Monthly timeframe. Never Fade in No man land.
The final bullish candle has massive Volume (highest in the rally) but a shrinking body or a long upper wick. This indicates huge buying effort but no further price progress.
RSI or CVD makes a lower high while price makes a higher high.
🔹 Survival Rules:
If price rallies due to ETF approval or good macro news, don't stand in front of it. Only Fade technical Pumps or Rumor Pumps.
Mandatory placement of SL just above the high of the reversal candle (Pinbar/Engulfing). If price breaks that high, the Fade thesis is invalid -> Cut immediately.
Do you have the patience to wait for crowd Exhaustion before entering, or do you often get caught up in the feeling that price is too high and Short recklessly?
News is for reference, not investment advice. Please read carefully before making a decision.