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Optimal Trade Entry (OTE) - ICT Concepts
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Optimal Trade Entry (OTE) - ICT Concepts

Introduction to OTE (Optimal Trade Entry)

In this section, the speaker introduces the concept of OTE (Optimal Trade Entry) and emphasizes the importance of understanding discount and premium. The speaker also mentions a PDF with Fibonacci settings and examples that will be linked in the description.

Fibonacci Settings for OTE

  • The speaker uses the following Fibonacci settings: 0.5, 0.62, 0.705, 0.79, and 1.
  • These settings are used in the Fibonacci retracement tool to identify the OTE zone.
  • The OTE zone includes the range from 0.62 to 0.79, with the midpoint at 0.705.

Using Fibonacci Retracement for OTE

  • To use Fibonacci retracement for OTE, find a swing high and swing low.
  • Draw the Fibonacci retracement tool from the swing high to the swing low.
  • The retracement levels will be marked on the chart.

Examples of Bearish and Bullish Scenarios

In this section, two examples are provided to illustrate how to apply OTE in bearish and bullish scenarios.

Bearish Example

  • Identify a swing high and swing low.
  • Draw Fibonacci retracement from high to low.
  • Look for an optimal trade entry (OTE) zone between 0.62 and 0.79.
  • Price reaches up into this area before reaching for sell-side liquidity below.

Bullish Example

  • Identify a swing low and wait for a swing high.
  • Draw Fibonacci retracement from low to high as price forms its range.
  • Look for a move out of the OTE area towards fair value gap above.

Aligning OTE with Other Price Distribution Arrays (PDAs)

This section discusses the importance of aligning OTE with other price distribution arrays (PDAs) for stronger confluences.

  • When drawing Fibonacci retracement and identifying the OTE zone, check for any PDAs that align.
  • Look for overlapping confluences, such as fair value gaps or significant candle patterns.
  • Multiple confluences increase the probability of a successful trade setup.

Analyzing Examples for Confluences

In this section, the speaker analyzes the examples provided earlier to identify additional confluences.

Bearish Example Analysis

  • The bearish example shows a fair value gap resting within the OTE zone.
  • Close candles near this area provide further confluence for a potential move lower.

Bullish Example Analysis

  • In the bullish example, there is a fair value gap above the OTE zone.
  • A large down closed candle sweeping lows before displacing and closing over it adds to the confluence.

Timestamps are approximate and may vary slightly.

Balance and OTE Trading Strategy Overview

In this section, the speaker discusses the balance and OTE (Optimal Trade Entry) trading strategy. They explain how to identify key levels and ranges on different time frames to find potential trading opportunities.

Identifying Ranges and OTE Entries

  • The speaker focuses on catching their attention on large down closed candles in the mean threshold.
  • They mark out ranges based on price movements, particularly when there is a move out of an OTE (Optimal Trade Entry) and a swing low is formed.
  • By marking out these ranges, they can look for potential OTE entries within them.

Example with Euro USD

  • The speaker uses Euro USD as an example, looking at the daily chart and then dropping down to the hourly chart.
  • They identify a displacement range on the daily chart and aim to see price reach back up into an OTE before moving lower.
  • On the hourly chart, they mark out the displacement range from the daily chart and observe price retracing back up into an OTE, filling the hourly fair value gap.

Searching for Another OTE Entry

  • As price starts to show displacement down, the speaker tracks it using highs and lows.
  • They extend the OTE down as new lows are made.
  • Price reaches back up into another OTE before displacing lower again.

Top-down Analysis Example with Gold

  • The speaker demonstrates a top-down analysis example using gold on the hourly chart.
  • They identify a displacement range or an OTE entry opportunity based on previous price action.
  • By dropping down to a lower time frame (five minutes), they look for price reaching back up into that identified OTE.

Generating Liquidity through Equal Lows

  • It is important to notice how price creates equal lows or generates liquidity in certain areas.

Entering Trades based on Fair Value Gaps and Order Blocks

  • The speaker looks for entry opportunities based on fair value gaps and order blocks.
  • They provide an example of a one-minute candle reaching up into a five-minute fair value gap before getting displaced lower, which can be considered an order block.

Example with ES (E-mini S&P 500 Futures)

  • The speaker analyzes ES on the daily chart, anticipating a TGIF (Thank God It's Friday) setup to cap the weekly range.
  • They drop down to the five-minute chart and mark out the daily open, looking for a New York reversal to go higher.
  • Failure swings are observed as potential reversal points.

Projecting Price Movements and Setting Targets

  • The speaker marks out projections from previous price swings to identify potential target areas.
  • They track highs and lows to adjust fib levels and set risk-to-reward ratios for trade entries.

Trade Execution and Results

  • An entry is made based on the identified OTE, with price eventually sweeping through it before displacing higher.
  • A fair value gap entry is also observed during this price action.

Timestamps have been associated with relevant bullet points.

New Section Understanding Failure Swings at the High

In this section, the speaker discusses failure swings at the high and how they can be identified and analyzed using daily open as a resistance level.

Failure Swings at the High

  • The speaker mentions that it takes some time, but eventually, they go and sweep those failure swings at the high.
  • Daily open is highlighted as a resistance level that provides some resistance to these failure swings.

I hope you enjoyed this video. If you did, please hit the like and subscribe button. See you in the next one!

The language used in this summary is English, which matches the language of the transcript.

Video description

This video I discuss Optimal Trade Entry (OTE). My focus is on the Fibonacci Retracement settings and using it within ranges. I do not talk discuss New York Killzone in this video. If you want future videos that go more in depth on this topic let me know in the comments below! Standard Deviations: https://youtu.be/wwMjc9RfpCg 📈Access to my course and mentorship! https://themarketlens.com/ 🚀 Get access to my custom indicator : https://ttradesmodel.com/ 📊20% off Journaling & Backtesting Software! Use code TTRADES ! https://tinyurl.com/TradezellaTTrades 👉Find the best prop firm deals here : https://selectpropfirm.com/ _50k Starter accounts at MyFundedFutures are now only $76 with no activation fee!! Use code SELECT https://myfundedfutures.com/?ref=4894_ _80% off with Apex! Use Code SELECT https://apextraderfunding.com/member/aff/go/selectpropfirm_ _Straight to funded accounts use code: SELECT https://tradeify.co/ref/SELECT/_ _10% off Funded Next! No monthly fees! Use code : SELECT https://fundednext.com/?fpr=select-prop31_ 🕐Multi asset investing + earn rebates on stock/etf options contracts: http://bit.ly/44IHvXn Join my Free Telegram! https://t.me/learnfromttrades Join my Free Discord! https://discord.gg/ttrades-community-1121090664453652593 All other Links : http://ttradesedu.com/ On some of the links above, I may earn a commission if you click and make a purchase. 0:00 Intro 0:34 Fibonacci Settings 1:12 TradingView Settings 1:16 Anchoring The Fib 2:47 Optimal Trade Entry (OTE) 4:08 Alignment With PD Arrays 5:50 Extra 7:46 Top Down Example 1 9:40 Top Down Example 2 12:29 Outro ICT OTE Series: https://www.youtube.com/playlist?list=PLVgHx4Z63paaRnabpBl38GoMkxF1FiXCF ICT 2022 Mentorship: https://youtube.com/playlist?list=PLVgHx4Z63paYiFGQ56PjTF1PGePL3r69s #ict #trading #education #forex #futures #daytrading CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Other fees may apply. See Public Fee Schedule https://public.com/disclosures/fee-schedule Brokerage services are offered by Open to the Public Investing, member FINRA & SIPC. Review Options Rebate Terms https://public.com/disclosures/rebate-terms. Options trading carries significant risk and may not be suitable for all investors. Please read and understand the Characteristics and Risks of Standardized Options before trading. Learn more at http://public.com/ODD