How do you draw the OTE on a chart?
- Find an impulse that broke structure: it took out a high for a long or a low for a short.
- Draw the Fibonacci from the start of the impulse (level 1) to its end (level 0), wick to wick.
- Mark the zone between 0.62 and 0.79 — that is the OTE. The 0.705 level inside it is the reference for a limit entry.
- The stop goes beyond the start of the impulse (level 1) or beyond the lower-timeframe structure inside the zone.
The target is the liquidity beyond the end of the impulse: the high for a long, the low for a short, or Fibonacci extensions past the 0 level.
Note the screenshots in our journal: we draw the grid the other way around, with 0 at the start of the impulse and 1 at its end. That's why the targets there are labeled 1.272 and 1.414, and the OTE zone corresponds to the 0.21–0.38 levels. The 0.5 level is the same whichever way you draw the grid.
How is OTE different from a regular Fibonacci retracement?
The grid is the same. What's different is what you apply it to. Classic technical analysis draws a Fibonacci over any move and waits for a reaction at 0.382, 0.5 or 0.618. In ICT the grid only goes on an impulse that broke structure and, as a rule, swept liquidity just before that, and the focus is on the deep part of the retracement, 0.62–0.79. The logic is that large players build their positions on the pullback at the best price: in discount for a long, in premium for a short.
How we use OTE at Fix Pips
To be honest, most of the time we work not from the classic 0.62–0.79 but from the 0.5 level — the middle of the range, where premium turns into discount. In our reports that's "test 0.5 ote". The reason: on GER40, after a strong impulse the pullback often stops at 0.5 and never reaches the classic OTE. So the 0.5 level is our first entry, and 0.62–0.79 is for adding to the position or for a more conservative entry.
OTE is strongest in combination with other zones. The best scenario is when a higher-timeframe fair value gap (FVG) or BISI/SIBI sits inside the retracement zone, and price swept liquidity just before.
Trade from the channel
The morning plan was to wait for price to break out of the manipulation toward the 4h SIBI. Frankfurt gave a 3m break of structure ahead of the London open, and London brought price back to the 0.5 level: a market entry, and the position played out within two minutes.
Trade in the journal (RU)Trade from the channel
SMT with EU50 on the 30-minute fractal, a reaction during Asia that left hourly FVGs, and an entry from 0.5. Stopped out: a pullback into the zone gives you a good price, but it doesn't guarantee the impulse will continue.
Trade in the journal (RU)Common mistakes
- Drawing the grid on a move that didn't break structure — that isn't an impulse, it's noise.
- Entering at the OTE against the higher-timeframe direction.
- Putting the stop inside the zone: deep wicks to 0.79 and beyond are normal.
- Treating OTE as a signal. It's where to look for an entry, not a reason to enter. Size the position off the stop — see risk management.
FAQ
What Fibonacci levels make up the OTE?
The classic OTE zone runs from the 0.62 to the 0.79 retracement, with 0.705 as the reference inside it. The 0.5 level and above mark premium or discount, but they aren't part of the OTE itself.
How do you draw the Fibonacci for OTE?
From the start of the impulse to its end: low to high for a long, high to low for a short, using the candle wicks. The impulse has to break structure; otherwise the retracement zone means nothing.
Can you enter at the OTE without confirmation?
You can, but it carries more risk. We only enter at the OTE at market when the context is strong, and usually with reduced size. Otherwise we wait for a lower-timeframe break of structure inside the zone.
This material is for educational purposes only and is not investment advice. Trading financial markets carries a high risk of losing capital; past trades do not guarantee future results.