Optimal Trade Entry (OTE): Fibonacci Secret for Smart Money Entry & Risk

The train has left the station. Do you chase it? No. You wait for the bus to come back to the stop.

**Optimal Trade Entry (OTE)** is the specific **"Sweet Spot"** where institutional algorithms stack their orders to catch the best possible price during a retracement. By entering at a deep discount, your **Stop Loss is minimal**, and your **Risk-to-Reward Ratio (RR)** is maximized.

SVG 1: Optimal Trade Entry (OTE) Levels for Deep Discount Buy

1. OTE Configuration and Logic

SMC uses a deeper discount for high-probability entries. Configure your Fibonacci tool with these levels:

**Logic of 0.705:** It is the precise midpoint between the 0.62 and 0.79 entry zones. When price reaches 0.705, institutions have received a substantial **discount**, making the subsequent price expansion highly probable.

2. The Strategy: Swing to Swing Entry

You must identify a clear **Structural Leg** (impulse move that broke structure or shifted trend) to draw your Fib correctly.

Bullish OTE Setup:

1. **Draw Fib:** From the **Swing Low (0.0)** to the **Swing High (1.0)**.
2. **Wait:** Let price drop below the 0.50 (Equilibrium).
3. **Entry:** Place Buy Limit at **0.705** or within the 0.62-0.79 zone.
4. **Stop Loss (Risk Control):** Place SL below the **1.0** (Structural Swing Low).
5. **Target (Reward):** The 0.0 (Swing High) and Fib extensions.

3. Confluence and Risk-to-Reward Maximization

The OTE level alone is just a math line. It becomes a **High-Probability Setup** when it aligns with an Institutional structure.

SVG 2: The Perfect Alignment (OTE, Order Block, and FVG Confluence)

The Confluence Setup:

• Price retraces to **0.705 OTE**.
• AT THE SAME TIME, price hits a **Bullish Order Block**.
• AT THE SAME TIME, price fills a **Fair Value Gap (FVG)**.

When these three align, the probability of a reversal is extremely high, allowing for a tight stop loss and superior RR.

SVG 3: Risk-Reward Maximization at OTE Entry

4. Risk Management and Execution Discipline

The OTE is the "Sniper Rifle" of trading. To succeed, you need surgical **risk control**.

• **Fixed Risk:** Risk **1% to 2%** of capital per trade. Use the Lot Size Calculator to determine size based on your tight stop loss.
• **Structural SL:** Your Stop Loss **must** be placed just outside the Low/High of the swing that created the move.
• **Patience (Risk Control):** Price will not always come back to 70.5%. **Let it go.** We only take the trade if we get our specific discount price to maintain the massive RR. Verify your target RR using the Risk & Reward Calculator.

5. Profit Taking (Extensions)

We target the expansion beyond the initial High (1.0). In your Fib settings, add the **Standard Deviation** targets: **-0.27** and **-0.62**.

**TP 1:** 0.0 (The High). **TP 2:** -0.27 (Expansion). **TP 3:** -0.62.

Final Thoughts

The **OTE** model is powerful because it prioritizes **low risk** and **high reward**. Embrace the patience required to wait for the deep discount. We trade on our terms, not the market's terms, ensuring disciplined execution. Monitor market flow via the Realtime Market Dashboard.

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