OTE + ICT Concepts Like Order Blocks & FVGs: 2 Combinations

Optimal Trade Entry (OTE) is a powerful ICT concept that helps traders identify high-probability trade setups based on retracements within trending markets.

When combined with Order Blocks and Fair Value Gaps (FVGs), OTE can provide a precise confluence of factors for confident trade entries and exits.

---

1. What is OTE?

OTE is based on the Fibonacci retracement tool, particularly the 62%-79% retracement levels.

After a strong move in a trending market (impulse move), price often retraces to these levels before continuing in the direction of the trend.

---

2. Why Combine OTE with Order Blocks and FVGs in ICT?

1. Increased Precision:

Using OTE with order blocks and FVGs enhances the accuracy of trade entries.

2. Confluence of Institutional Zones:

Order blocks and FVGs represent institutional interest, while OTE identifies retracement zones, creating high-probability trade setups.

3. Minimizing Risk:

These tools together help refine entry points, reducing unnecessary exposure.

---

3. Steps to Combine OTE, Order Blocks, and FVGs in ICT

1. Identify Market Structure

• Determine if the market is in an uptrend or downtrend.
• Look for higher highs and higher lows (bullish) or lower highs and lower lows (bearish).

2. Locate the Impulse Move

Spot the most recent strong bullish or bearish move.

This serves as the basis for the OTE and highlights potential areas of retracement.

3. Draw the Fibonacci Levels

• Place the Fibonacci tool from the swing low to the swing high (in an uptrend) or from the swing high to the swing low (in a downtrend).
• Focus on the 62%-79% retracement zone for OTE.

4. Mark Order Blocks

• Identify the last bullish (uptrend) or bearish (downtrend) candle before the impulse move.
• This becomes a potential zone for price reversal or continuation.

5. Identify Fair Value Gaps

Look for price imbalances (gaps between consecutive candles) within the Fibonacci retracement zone or near the order block.

6. Combine for Entry

• Wait for price to retrace into the OTE zone while aligning with an order block and/or FVG.
• Look for confirmation, such as rejection candlesticks or a break of structure on lower timeframes.

---

4. Examples of Combining OTE with Order Blocks and FVGs ICT

Example 1: Bullish Scenario on EUR/USD

1. Impulse Move:
   • EUR/USD rallies from 1.0800 to 1.1000.
2. Fibonacci Tool:
   • Draw Fibonacci from 1.0800 (swing low) to 1.1000 (swing high). The 62%-79% retracement zone is between 1.0876 and 1.0852.
3. Order Block:
   • Identify the last bearish candle at 1.0860 before the impulse move.
4. FVG:
   • A fair value gap exists between 1.0865 and 1.0870, aligning with the order block and OTE.
5. Trade Setup:
   • Wait for price to retrace into the OTE zone and observe bullish rejection (e.g., bullish engulfing).
   • Entry: 1.0865.
   • Stop-loss: Below the swing low at 1.0845.
   • Target: Previous high at 1.1000.

---

Example 2: Bearish Scenario on GBP/USD

1. Impulse Move:
   • GBP/USD drops from 1.3200 to 1.3000.
2. Fibonacci Tool:
   • Draw Fibonacci from 1.3200 (swing high) to 1.3000 (swing low). The 62%-79% retracement zone is between 1.3140 and 1.3160.
3. Order Block:
   • The last bullish candle at 1.3150 before the bearish impulse is the bearish order block.
4. FVG:
   • A fair value gap exists between 1.3155 and 1.3145, overlapping with the OTE zone.
5. Trade Setup:
   • Wait for price to retrace into the OTE zone and confirm rejection (e.g., shooting star or bearish engulfing).
   • Entry: 1.3150.
   • Stop-loss: Above the order block at 1.3170.
   • Target: Next support level at 1.2950.

---

5. Benefits of Combining OTE with Order Blocks and FVGs in ICT

1. Higher Accuracy: Combining these ICT concepts helps pinpoint precise entry zones.
2. Low Risk, High Reward: Narrowing down entries reduces risk while maximizing profit potential.
3. Understanding Market Intentions: These tools reveal where smart money operates, allowing traders to align with institutional moves.

---

6. Conclusion

Combining OTE with Order Blocks and FVGs in ICT trading provides a strategic advantage.

This approach enables traders to identify zones of institutional interest and enter trades with confidence.

Practicing these concepts on historical charts and live markets will refine your skills and improve trading consistency.