What is fade and trend process?

<p id="isPasted">The trend and fade process in trading are two contrasting strategies. Trend trading involves buying an asset whose price is rising (an uptrend) and selling an asset whose price is falling (a downtrend), on the belief that the current momentum will continue. Fading trading is a contrarian strategy where a trader does the opposite: selling an asset that is rising and buying an asset that is falling, anticipating a market reversal.&nbsp;</p><p><strong>Trend process</strong></p><p>Definition: A trend is the general direction in which an asset's price is moving over time. </p><ul><li>Uptrend: Characterized by a series of higher highs and higher lows.</li><li>Downtrend: Characterized by a series of lower lows and lower highs.</li><li>Sideways/Range-bound: A period where the price is not moving in a particular direction. </li></ul><p>Process:</p><ol><li>Identify the trend: Traders use tools like moving averages, the Relative Strength Index (RSI), and the Average Directional Index (ADX) to determine the trend's direction and strength.</li><li>Enter a position: In an uptrend, a trader enters a "long" position (buys) to profit from the rising price. In a downtrend, they enter a "short" position (sells) to profit from the falling price.</li><li>Ride the trend: The position is held as long as the trend is sustained. Trend traders aim to catch the bulk of the market's momentum.</li><li>Exit the position: The trade is closed when the trend shows signs of reversal or loses strength. </li></ol><p><strong>Fade process</strong></p><p>Definition: A fade is a contrarian strategy that involves trading against the current, high-momentum trend. The idea is that the market has overreacted to a particular event, and the trend will soon reverse. This is a high-risk strategy typically used by experienced traders.&nbsp;</p><p>Process:</p><ol><li>Identify an extended trend: The trader looks for an asset that has moved significantly and rapidly in one direction, often following major news or an initial price spike.</li><li>Identify reversal signals: Using technical indicators like RSI or chart patterns, the trader looks for signs that the momentum is exhausted and the trend is losing steam.</li><li>Enter a contrarian position: The trader "fades" the move by placing a sell order into an uptrend or a buy order into a downtrend, betting on a reversal or a temporary correction.</li><li>Exit the position: The trade is exited quickly, often when the price moves back towards the mean, as a fade is typically a short-term, volatile trade. </li></ol>