Concepts

Optimal Trade Entry (OTE)

The optimal entry zone identified by ICT between the 61.8% and 79% Fibonacci retracement of an impulsive move, where the risk-to-reward ratio is maximized.

Diagram: Optimal Trade Entry (OTE)

What Is the Optimal Trade Entry

The Optimal Trade Entry (OTE) is an ICT concept that defines the ideal zone to enter a trade during a pullback. It sits between the 61.8% and 79% Fibonacci retracement levels of the last impulsive move. In this zone, the risk-to-reward ratio is optimal because you are entering near the end of the retracement.

How to Identify It

  1. Identify an impulsive move that broke structure (BOS).
  2. Draw Fibonacci from the start of the impulse to the end.
  3. The OTE zone lies between the 61.8% and 79% retracement levels.
  4. The 70.5% level is considered the exact sweet spot.
  5. Look for confluence with an OB or FVG within that zone.

How to Use It in Trading

  • Wait for price to retrace at least to the 61.8% level before looking for an entry.
  • An Order Block within the OTE zone is an extremely high-probability setup.
  • Place your stop loss below the 100% level (start of the impulse) with a small buffer.
  • Your minimum take profit should be the high/low of the impulse (1:1), ideally the next liquidity level.
  • If price pushes through the 79% level without reacting, the probability of the OB holding decreases.

Relationship with Premium/Discount

The OTE zone in a bullish trend falls within the Discount zone, and in a bearish trend within the Premium zone. This reinforces the logic of buying low and selling high within the context of the current range.