---
title: "Fade the Dip Strategy"
slug: "strategies-and-features-fade-the-dip"
description: "Discover the \"Fade the Dip\" strategy, a custom trading approach designed to capitalize on market reversals using moving averages, RSI, and options trading. Learn the open and close conditions, earnings handling, and specific options selections for optimal trading success."
tags: ["Fade the Dip", "Exponential Moving Averages", "Simple Moving Average", "Moving Averages", "Delta", "Put Options", "TradeMachine Features", "Earnings Trading"]
updated: 2024-07-25T15:46:50Z
published: 2024-07-25T15:46:50Z
canonical: "learn.trademachine.com/strategies-and-features-fade-the-dip"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://learn.trademachine.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Fade the Dip Strategy

This is a discussion of the "Fade the Dip" strategy.

### Overview

- Short put spread
- 2 legs

### Fade the Dip Strategy Settings

#### Fade the Dip Open Conditions:

- Stock crosses up through 200 Day SMA
- Stock > EMA10Days
- RSI20Days < 70

![image.png](https://cdn.document360.io/b73389a5-b202-4bf4-8df2-8c69e8edbb3b/Images/Documentation/image%2890%29.png)

#### Details on Options TradeMachine is Selecting for Fade the Dip Strategy:

- 1x **short 40 delta** put near **30 days to expiration**
- 1x **long 30 delta** put near **30 days to expiration**

![image.png](https://cdn.document360.io/b73389a5-b202-4bf4-8df2-8c69e8edbb3b/Images/Documentation/image%2891%29.png)

#### Earnings Handling for Buy the Dip Strategy:

- [Never Trade Earnings](/v1/docs/earnings-and-trademachine)

#### Fade the Dip Close Conditions:

- Gains Above 50%
- Options reach expiration

![image.png](https://cdn.document360.io/b73389a5-b202-4bf4-8df2-8c69e8edbb3b/Images/Documentation/image%2892%29.png)

#### Open next trade for Fade the Dip:

- [At Normal Time](/v1/docs/what-does-the-and-open-next-trade-at-normal-time-and-re-open-immediately-mean)

![image.png](https://cdn.document360.io/b73389a5-b202-4bf4-8df2-8c69e8edbb3b/Images/Documentation/image%2871%29.png)

The first video discusses the Fade the Dip strategy while also incorporating our [proprietary AI measures](/v1/docs/a-remarkable-finding-for-traders).

In the second video, see the combination of moving averages and RSI that have outperformed the market over 5-, 3-, 2-, and 1-year, using a "Fade the Dip" trigger and how it compares and contrasts to the "Buy the Dip" model.

[Video Transcript](https://learn.trademachine.com/docs/fade-the-dip-strategy-transcript)