| Level | Price | Type | Notes |
|---|
Fibonacci retracement levels mark where price is likely to pull back before continuing a trend. The key levels are 23.6%, 38.2%, 50%, 61.8% and 78.6%. In Smart Money Concepts, the Optimal Trade Entry (OTE) zone sits between the 62% and 79% retracement — the highest-probability area to enter with the trend.
| Level | Type | Meaning |
|---|---|---|
| 23.6% | Shallow retrace | Strong trend, minor pullback |
| 38.2% | Retracement | Common continuation entry |
| 50% | Equilibrium | Midpoint — premium/discount split |
| 61.8% | Golden ratio | Key SMC entry, start of OTE |
| 70.5% / 79% | OTE zone | Optimal Trade Entry sweet spot |
| 127.2% / 161.8% | Extension | Take-profit targets |
To draw a retracement, plot from the swing low to swing high in an uptrend (or high to low in a downtrend). Price above 50% is in premium (look to sell); below 50% is discount (look to buy).