Free space optical communication (FSO) is a technique based on transmission of data by propagating the light in free space. FSO is inexpensive, providing high data rates, high capacity, high security, low power and use the license free frequency spectrum. That's why recently FSO is an active area of research. This is an effective technique to transmit the data at high bit rate over short distance. Nevertheless FSO is still facing many problems like bad weather conditions, atmospheric turbulence and multipath fading. Fading is the major challenge faced by FSO. In this paper, we discussed some techniques like coherent detection and OFDM to reduce fading effects and improve the system performance.