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FXSnipers Quantitative Desk Series

Fibonacci Optimal Trade Entry (OTE) Pullback Strategy

Forex • EURUSD, GBPUSD, XAUUSD • M15 • Trend Following
London/New York Overlap
07:00 - 17:00 UTC
Complexity: Advanced
Max Risk 0.5% - 1.0% maximum equity risk per setup.
Target R:R Split TP model: 50% closed at -27% extension, 50% closed at -61% extension.
Break-Even Trigger Move stop loss to entry price + spread as soon as TP1 (-27%) is achieved.
Automation Semi-automated

Pre-Trade Verification Checklist

H1 Impulse Validation: Confirm the H1 leg breaks structural high/low and exceeds 2x ATR(14).
Fibonacci Mapping: Draw Fibonacci levels from swing start (0%) to swing end (100%).
Retracement Monitoring: Wait patiently for price to enter the 62% - 79% zone during active trading hours.
M15 Rejection Confirmation: Look for an M15 closing candle displaying a prominent rejection wick inside the 70.5% OTE area.
Risk Parameters Set: Verify stop loss is beyond 100% and targets are mapped to -27% and -61% extensions.

Entry Execution Criteria

  1. Identify an H1 impulse leg that breaks the previous swing structure and spans a distance greater than 2x ATR(14).
  2. Draw the Fibonacci retracement tool from the absolute start (0%) to the absolute end (100%) of the validated impulse leg.
  3. Wait for price to retrace into the 62% to 79% Fibonacci zone on M15, specifically monitoring the 70.5% midpoint.
  4. Execute a limit or market order only when an M15 bar prints and closes with a clear rejection wick inside the OTE zone.

Take-Profit & Target Exit

  • Take Profit 1: Exit 50% of the position at the -27.0% Fibonacci extension level.
  • Take Profit 2: Exit the remaining 50% of the position at the -61.8% Fibonacci extension level.
  • Move stop loss to breakeven once TP1 is fully secured.

Invalidation & Emergency Exit

  • Cancel pending order and void setup if an H1 candle body or close breaks beyond the 79% Fibonacci retracement level.
  • Void the setup if 12 consecutive H1 bars pass without the price ever tapping the OTE zone or triggering the entry.
Stop-Loss Positioning

Placed just beyond the 100% level (the absolute start of the impulse leg) plus a small buffer of 2-5 pips to avoid wick hunting.

Documented & Formatted by FXSnipers Strategy Lab • fxsnipers.com/strategy-lab/fibonacci-ote-pullback-strategy
Desk Cheat Sheet Specification v1.0