Inner Circle Trader OTE: ICT Fibonacci Retracement Settings on Tradingview (2024)

Discover the precision of Inner Circle Trader (ICT) Fib RetracementIn trading, a retracement represents a temporary reversal in the direction of a financial asset's price, which is part of... More Settings on TradingView, a strategic tool for traders seeking to leverage Fibonacci retracementIt's based on the idea that markets will retrace a predictable portion of a move, before continuing in the original... More levels for market analysis. Understanding how to calculate Fibonacci retracement levels, including those above 100%, and their application across various assets like forex, crypto, and stocks, becomes a game-changer in identifying premium trade entries and exits.

When diving into the world of trading, particularly with a focus on Fibonacci retracement levels as outlined in ICT’s methodology, traders are equipped with a nuanced strategy for pinpointing potentially lucrative entry points. This method hinges on the strategic drawing of a Fibonacci retracement from a significant low to the peak of an impulse swing.

This technique isn’t just about identifying a singular optimal entry point; it’s about recognizing a confluence of factors that, when combined, signal a higher likelihood of a trade’s success. These factors include alignment with higher timeframe bullish trends, suggesting a strong undercurrent that could propel prices further. The ultimate goal of employing this strategy is to capture internal range liquidity with an eye towards going long within a predetermined range. This anticipates a breakout that targets liquidity beyond the current range, effectively using the market’s natural ebb and flow to the trader’s advantage.

What is the Fibonacci sequence’s?

The Fibonacci sequence is a renowned series of numbers discovered by Leonardo of Pisa, better known as Fibonacci. This mathematical sequence was first introduced to the Western world in the 13th century through Fibonacci’s seminal work, “Liber Abaci.” The book showcased the sequence’s potential by applying it to various practical problems, such as calculating the growth of a rabbit population under ideal conditions. Originating with two simple numbers, 0 and 1, each subsequent number in the sequence is the sum of its two predecessors, creating an infinitely extending series: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so forth. This straightforward rule of addition reveals a complex and beautiful pattern that transcends mathematics, finding its place in nature, art, architecture, and modern digital technology.

The Fibonacci sequence’s relevance extends far beyond its mathematical elegance; it plays a significant role in various fields such as computer science, financial markets, and especially in trading and investment strategies. Traders in stock, forex, and cryptocurrency markets use Fibonacci ratios derived from this sequence to predict potential points of market support and resistance. These ratios, including the famous 61.8% (often referred to as the “golden ratio”), 38.2%, and 23.6%, are utilized to identify retracement levels and forecast the extent of price movements. The application of Fibonacci levels enables traders to make informed decisions by providing insights into market trends, potential reversals, or continuation patterns.

What is ICT Fib Retracement?

ICT’s Optimal Trade EntryThe optimal trade entry can be determined by looking for shifts in market structure, retracement levels, or other technical indicators.... More (OTE) is a precision trading technique that zeroes in on the best entry points along the trend’s trajectory. It emphasizes the importance of market timing, particularly the New York session hours between 8:30 and 11:00 AM, as well as specific Fibonacci retracement levels to spot potential reversals and continue with the prevailing trend. The OTE strategy by ICT harnesses key Fibonacci values and market timings, with a focus on the New York trading sessionThe Forex market is often segmented into five trading sessions: Sydney, Tokyo, London, New York, and Overlap Sessions. This division... More, to identify high-probability trade entries. This approach integrates the rhythms of the market with technical retracement levels for entries that resonate with the market’s structural flow.

ICT’s teachings illuminate the path to mastering Fibonacci retracement levels, emphasizing the importance of the 62%, 70.5%, and 79% levels. These are crucial for traders aiming to pinpoint equilibrium levels, assess market discounts or premiums, and strategize around strong Fibonacci retracement levels. Whether it’s integrating Fibonacci retracement levels in platforms like Tradingview or Zerodha or analyzing Fibonacci retracement levels for Bitcoin and other cryptocurrencies, the ICT approach equips traders with the knowledge to navigate markets more effectively.

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ICT Fibonacci Retracement Settings on Tradingview

Optimal Trade Entry (OTE) in trading, focusing on using Fibonacci retracement settings to identify key entry zones between 0,62 and 0,79 Fibonacci levels, including the 0,705 midpoint. The presenter emphasizes the importance of understanding discount and premium, swing highs and lows, and aligning OTE with other market indicators like PD arraysPD arrays, or Premium Discount arrays, are a concept in ICT's teachings that help traders identify key price levels and... More and fair value gaps for more precise and potentially profitable trading setups. Through both bearish and bullish examples, including lower timeframe analysis, the video demonstrates how to strategically find and manage trades by aligning with significant market movements and liquidity zones. To effectively use the ICT Fibonacci retracement levels for identifying trade entry points and profit-taking zones in TradingView, follow the outlined steps to set up and adjust the Fibonacci settings to align with ICT methodologies:

Set up Fibonacci Settings:

1. Select the Fibonacci retracement tool from your TradingView platform’s toolbar.
2. Click and drag the tool from a swing high to swing low (or the reverse), depending on the trend direction you are analyzing, to set it on the chart.

Adjust Fibonacci Levels:

1. Double-click the Fibonacci tool on your chart to enter its editing mode.
2. Right-click on the tool to open the settings menu.
3. Navigate to the “Fib levels” section and adjust the levels to include:
   • 0: First Profit Scaling
   • 0.505: Equilibrium (50% level)
   • 0.618: 62% Retracement
   • 1.0: 100% (original position)
   • 0.705: Optimal Trade Entry (OTE)
   • 0.79: 79% Retracement
   • -0.62: Target 2
   • -0.27: Target 1
   • -1: Symmetrical Price
4. After configuring the levels, ensure to click “Save” or “OK” to apply and preserve these settings for future analyses.

This setup will enable you to leverage the ICT Fibonacci retracement approach effectively within TradingView, facilitating the identification of strategic trade entries, exits, and profit scaling points based on the ICT trading methodology.

ICT Optimal trade entry rules

ICT’s optimal trade entry (OTE) rules involve looking for specific setups that offer favorable entry points into the market. The OTE typically involves a standard three-quarter pullback from a high to a low, trading up into a specific sweet spot that ICT teaches as the optimal trade entry point. This entry pattern can be identified by observing price movements and key levels, such as fair value gaps and market structures. It’s essential to stick to your rule-based ideas and not deviate from your risk and equity managementThe "Equity Management Trading Glossary Definition" for WordPress is a profound resource that offers comprehensive knowledge on trading terms and... More strategies when executing trades, even if there are multiple potential setups available. By following these guidelines and being patient for the right setups, traders can increase their chances of success in the market.

The Optimal Trade Entry (OTE) strategy, as defined within the Inner Circle TraderExplore Inner Circle Trader's unique journey in Forex trading, where risk awareness and challenging norms lead to true market success. More (ICT) framework, emphasizes entering trades within the 0.62, 0.75 and 0.79 Fibonacci retracement levels, ideally where there’s a confluence of a liquidity hunt at the previous day’s low, a market structure shift, and a fair value gap. The Inner Circle trading strategy advocates for placing stop losses at the Fibonacci 1 level to manage risk while targeting high-probability reversal zones for entry. This approach combines technical precision with key market dynamics to optimize entry points and manage risk.

Inner Circle Trader OTE trading Examples

What is the best fib setting for ICT?

The optimal Fibonacci (Fib) settings for Inner Circle Trader (ICT) methodologies focus on precise levels that can significantly enhance trade entry effectiveness. Specifically, these settings involve drawing the Fibonacci retracement tool from a significant low to the high of an impulse swing in the market. The key levels to pay attention to are:

• 62% (0.62): This level is often seen as the golden retracement level, offering a high probability for reversals in trend-following setups.
• 70.5% (0.705): A more refined level within ICT teachings that provides an even tighter zone for identifying potential reversals, particularly useful in markets with high volatility.
• 79% (0.79): This level is considered by many ICT followers as a deep retracement point, offering entries close to the end of retracements for trades aiming to capture the continuation of the initial impulse.

For the best application of these settings, traders should look for overlaps with other significant technical indicators, such as:

• Fair Value Gaps: Areas where price has moved quickly through, leaving a gap in value that may be revisited.
• Short-Term Lows: Points where price has recently found support, indicating potential areas for stop placement or reversal.
• Bullish Order Blocks: Areas of significant buying interest that can provide support to prices on a retracement.

Incorporating higher timeframe analysis into the strategy enhances its effectiveness, ensuring that trades align with the broader market trend and sentiment. By seeking confluences among these factors — retracement levels, fair value gaps, short-term lows, and bullish order blocks — traders utilizing ICT methodologies can significantly increase their chances of executing successful trades.