Fading moves is the setup people love and lose to in equal measure. Seven threads on the strategy board describe different versions: the daily open on EURGBP, the 200 EMA stretch, three-push exhaustion, the London lunch dip, and a couple of general ones. What they share is that conditions matter more than the entry signal. Here's the summary.
Conditions first
The M1 mean reversion thread lists when fades tend to work:
- The quiet stretch from late New York into early Asia, on EUR and GBP pairs, with no new flows coming in.
- An obvious intraday range, tested at least twice at each end.
- No scheduled data in the next 30 minutes.
- A flat higher timeframe, like an H1 20 EMA with no clear slope.
Measuring "stretched"
Every thread has its own ruler, and they're worth comparing:
- Distance from the daily open. The EURGBP thread uses the open as a magnet, since that pair rotates around it more than it trends, and compares the current distance with how far EURGBP usually travels from the open by midday over the last month.
- Distance from the 200 EMA on M15. Near it, range and pullback trades both ways are fine. Far from it, something bigger may be going on. A reply measures the distance in ATR rather than by eye, with about two ATR as the threshold.
- Outside the morning range. The lunch dip thread marks the London morning high, low and midpoint on M5, and only counts price as stretched when it's clearly outside the range, not poking a pip past the high.
The three-push thread counts distinct pushes into a session high on M1, each making a higher high with weaker candles: smaller bodies, longer upper wicks, less follow-through. It's a pure scalp with a small target, so a reply is strict on spread and skips it when EURUSD is wider than usual. Another reply leaves it alone when M5 is still printing strong candles in the trend direction, which is a sensible higher-timeframe check.
The trend exhaustion thread adds pullbacks getting deeper and taking longer, each correction eating more of the previous leg. It treats RSI or MACD divergence as a reason to manage a trade, not to enter against it, since divergence alone gives lots of early signals.
Targets, stops and time
A few practical points repeat. Don't expect price to go all the way back to the mean, which a reply in the 200 EMA thread makes explicit. Give the stop a little extra room on slow pairs, since EURGBP likes one last small push beyond the extreme. Check the components: if EURUSD and GBPUSD are both calm and EURGBP is drifting, the fade is cleaner than when one leg is moving hard. And the lunch dip thread added a time stop: no move back towards the midpoint within about thirty minutes, close it. That thread also checks the US calendar before London lunch every day, because a release at 13:30 London turns a calm lunch reversion into something else.
The disagreement
Mostly about the ruler. The daily open is simple and pair-specific, the EMA distance in ATR is more portable, the morning range is session-specific. None of the threads claimed one was better. Picking one and measuring it honestly seems to matter more than which.
What do you use to decide a move is stretched enough to fade, and which pair has it worked on most reliably?
Threads this pulls from
- Mean Reversion Scalping on M1: When Fading Moves Works
- Fading stretched moves away from the daily open on EURGBP, a calm mean reversion setup
- Distance from the 200 EMA on M15 as a stretch filter before I fade anything
- Mean Reversion vs Trend Following, Choosing the Right Mode
- Three push exhaustion on M1 at session extremes, small trades with a tight idea
- Spotting Trend Exhaustion Without Guessing the Top
- The late London lunch dip on EURUSD, trading the return to the morning range
