Optimal Trade Entry (OTE)
The 62% to 79% retracement zone of an impulsive leg, where a trader enters the pullback instead of chasing the move.
What it is
After a displacement leg, the Optimal Trade Entry is the fib retracement band between 0.62 and 0.79 of that leg (0.705 is the midpoint traders watch). It's the discount zone for longs (or premium zone for shorts) where risk is smallest relative to the leg's origin.
Why it matters
Entering at the OTE instead of at the breakout places the entry closer to the leg's origin, so the stop is shorter for the same idea and the risk is defined before the order goes in.
NQ example ILLUSTRATION
NQ sweeps a low and displaces 80 points higher. The OTE sits 50 to 63 points back down the leg. A long placed in that zone, with the stop just beyond the leg's origin, risks roughly 17 to 30 points, against about 80 for a long bought at the top of the displacement candle.