Optimal Trade Entry (OTE) in Trading
March 9, 2025!
Optimal Trade Entry (OTE) in Trading
Optimal Trade Entry (OTE) is a concept popularized by ICT (Inner Circle Trader), used to refine entries within a price retracement zone. It is based on Fibonacci levels and helps traders enter at optimal points in a trending market while minimizing risk.
How OTE Works
OTE focuses on buying at a discount or selling at a premium within a Fibonacci retracement range. The key retracement levels used are:
✅ 61.8% – Golden Ratio
✅ 70.5% – ICT’s preferred entry level
✅ 79% – Deep retracement
OTE in a Bullish Setup (Buying at a Discount)
Identify a strong impulse move up (higher high, higher low).
Pull the Fibonacci tool from swing low to swing high.
Look for price to retrace into the 61.8% – 79% zone.
Enter long if the market shows confirmation (FVG, breaker block, SMT divergence).
Stop loss placed below the swing low.
Target previous highs or Fibonacci extensions (27%, 62%).
OTE in a Bearish Setup (Selling at a Premium)
Identify a strong impulse move down (lower high, lower low).
Pull Fibonacci from swing high to swing low.
Look for price to retrace into the 61.8% – 79% zone.
Enter short if confirmation appears (MSS, SMT, rejection wicks).
Stop loss placed above the swing high.
Target previous lows or Fibonacci extensions.
Why OTE Matters
✔ Better Risk-to-Reward – Allows smaller stop losses with greater potential returns.
✔ Precision Entries – Avoids chasing price and entering too early.
✔ Liquidity Awareness – Often aligns with liquidity pools and smart money entries.
Using OTE with displacement, FVGs, and SMT divergence enhances confirmation and prevents getting caught in weak trades.