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OTE: the zone depends on your anchors
A Fibonacci tool cannot choose the right swing for you. Let us do the arithmetic ourselves.
Calculate ICT’s 62–79% retracement convention from explicitly selected extremes.
OTE, Optimal Trade Entry, is ICT’s name for studying a deep retracement area, commonly 62–79% of a selected move. The name does not establish that the area is objectively optimal.
For an upswing, retracement is measured back down from its high. First select a completed low-to-high move; do not move its anchors after seeing where the pullback stopped.
The 70.5% level sometimes used within this convention is another reference, not a precision guarantee. Location still needs context, invalidation, execution assumptions and independent testing.
A downswing is the mirror: measure the return upward from the low. If your platform reverses the labels, check the prices with arithmetic rather than trusting the colour of the tool.
Let’s work through it
- Mark the reference before revealing the outcome.
- Calculate ICT’s 62–79% retracement convention from explicitly selected extremes.
- Record the result and the conditions that would reject the idea.
Let’s use numbers · hypothetical example
The move 100→120 has width 20. A 62% pullback gives 120 − 0.62 × 20 = 107.60; a 79% pullback gives 104.20. The price zone is 104.20–107.60, with 70.5% at 105.90. For the opposite move 120→100, the upward retracement zone is 112.40–115.80.
Easy mistakes to watch for
- Mistaken assumption: 112.40.
- Changing the definition after seeing the result.
- Ignoring spread, slippage or the loss limit.
Keep in mind
This is a hypothetical study, not a signal. A chart label cannot identify institutional intentions or guarantee a result; include costs and a predefined loss limit.
Your turn
Calculate both directions on paper, then match the prices to your chart tool before revealing later candles.
A quick check before we move on
For an upswing 100→120, where is the 62% retracement?
- 107.60.
- 112.40.
- 62.00.
Check answer
107.60. Retrace downward from 120:120−0.62×20=107.60.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
