ICT Fibonacci configuration uses non-standard levels: retracements at 0.5, 0.618, 0.65, 0.705, and 0.786, with extension targets at -0.27, -0.62, -1.0, -2.0, -2.5, and -4.0 for systematic profit-taking. These settings, taught by Michael Huddleston (Inner Circle Trader) since the late 2000s, replace the generic Fibonacci suite found on most platforms. The goal is to pinpoint institutional entry zones (Optimal Trade Entry, OTE) and exit levels aligned with algorithmic liquidity. The forex market processed $7.5 trillion per day in 2022, with 57% of that volume concentrated in London and New York sessions, the two windows where ICT Fibonacci setups perform best.
Why ICT uses a custom Fibonacci configuration
The standard Fibonacci suite (0.236, 0.382, 0.5, 0.618, 0.786) is a generic tool available on every platform. Michael Huddleston redesigned this configuration to align with what he describes as the actual behavior of institutional trading algorithms, documented extensively in his ICT 2022 and 2023 course series on the official Inner Circle Trader YouTube channel.
Standard Fibonacci vs. ICT Fibonacci
| Level | Standard Fibonacci | ICT Fibonacci | ICT role |
|---|---|---|---|
| 0.236 | Yes | No | Removed (too shallow for institutional accumulation) |
| 0.382 | Yes | No | Removed (outside institutional zone) |
| 0.5 | Yes | Yes | Market equilibrium (Fair Value) |
| 0.618 | Yes | Yes | Golden pocket lower bound |
| 0.65 | No | Yes | Golden pocket upper bound |
| 0.705 | No | Yes | OTE (Optimal Trade Entry) |
| 0.786 | Yes | Yes | Maximum valid retracement boundary |
| 1.0 | Yes | Yes | Swing anchor |
The key change: ICT removes 0.236 and 0.382 as too shallow to reflect genuine institutional accumulation, and adds 0.65 and 0.705 to precisely bracket the OTE entry zone.
Why the 0.705 level matters in ICT
The 0.705 level marks the boundary between the discount zone (favorable for buys in a bullish trend) and the zone that is too deep where the directional thesis breaks down. This is where institutional algorithms statistically place limit orders after a displacement. A retracement to 0.705 on a bullish swing offers the best risk-to-reward structure: stop just below 1.0, profit target at -1.0.
Retail trader context
According to the European Securities and Markets Authority (ESMA), between 74% and 89% of retail clients lose money trading CFDs. A precise entry framework like ICT Fibonacci reduces random entries and improves setup repeatability across sessions.
ICT Fibonacci retracement levels: the exact settings
Retracement: 0, 0.5, 0.618, 0.65, 0.705, 0.786, 1.0
Here is the complete level list to enter into TradingView to reproduce the official ICT configuration:
| Value | Description | ICT application |
|---|---|---|
| 0 | Swing start (lower anchor on a long trade) | Reference low |
| 0.5 | Market equilibrium (Equilibrium) | Premium/discount separator |
| 0.618 | Golden pocket lower | First institutional reaction zone |
| 0.65 | Golden pocket upper | Second accumulation level |
| 0.705 | Optimal Trade Entry | Key institutional entry level |
| 0.786 | Maximum valid retracement | Boundary before setup invalidation |
| 1.0 | Swing end (upper anchor on a long trade) | Stop loss reference |
How to add these levels on TradingView step by step
Place the Fibonacci tool
Open settings
Navigate to the Levels tab
Remove non-ICT levels
Add missing levels
Add negative extension levels
Save as default template
Removing default levels not used in ICT
TradingView shows 0.236 and 0.382 by default, and sometimes positive extensions (1.236, 1.382, 1.618) that are not part of the ICT setup. Each unnecessary level adds a line to your chart and dilutes the clarity of the OTE zone. Keep only what appears in the official ICT level list. A clean chart is a readable chart.
ICT Fibonacci extension and standard deviation levels
Extensions define profit targets after an OTE entry. ICT uses negative extensions (below the swing low on a long trade, above the swing high on a short).
Extension: -0.27, -0.62, -1.0, -2.0, -2.5, -4.0
| Extension | ICT name | Primary use |
|---|---|---|
| -0.27 | Symmetrical extension | First partial profit (quick scalp) |
| -0.62 | Moderate extension | Primary target on short moves |
| -1.0 | Full extension | Standard target (approx. 1:2 R:R from 0.705) |
| -2.0 | Standard deviation 2 | Intermediate target on clear trend days |
| -2.5 | Standard deviation 2.5 | Strong trend target with momentum |
| -4.0 | Standard deviation 4 | Major trend target (high-volume sessions) |
Using extensions as profit targets
In the ICT method, the -1.0 target delivers approximately a 1:2 risk-to-reward ratio when entering at 0.705 with a stop loss just below 1.0. The -2.0 extension (standard deviation 2 in ICT terminology) is reserved for high-momentum sessions, particularly the New York Open (7:30-10:00 AM EST) during Kill Zones when the daily narrative is clearly directional.
For a deeper look at standard deviation projections and how ICT maps price targets across sessions, see the ICT standard deviation projection guide.
Extension -1.0 vs -2.0: which to use?
On major USD pairs (EUR/USD, GBP/USD), the -1.0 extension is the most reliable target for standard OTE setups. Extensions of -2.0 and -2.5 require a clearly defined daily trend and confluence with the IPDA Data Range to be valid targets. Reaching for -4.0 is rare and applies mainly to major news-driven trending days.
Confluence with Order Blocks and FVGs
ICT Fibonacci does not work in isolation. OTE zones (0.618 to 0.705) become significantly more reliable when they overlap with:
- A bullish Order Block (OB) on the 15-minute or 1-hour timeframe
- An unfilled Fair Value Gap (FVG) below the retracement zone
- A BSL (Buy Side Liquidity) zone above the swing high
See the ICT order block backtest strategy guide for how to combine these confluence factors in a systematic approach. Backtrex identifies these confluences automatically in its visual backtesting engine.
OTE and golden pocket in practice
Drawing Fibonacci on a swing move
For a long trade during a pullback:
- Identify the swing low (anchor 0) and the swing high (anchor 1) of the impulse move.
- Draw the Fibonacci from low (0) to high (1). The retracement displays from top to bottom.
- The OTE zone is the band between 0.618 and 0.705.
For a short trade: reverse the anchors (draw from swing high to swing low).
For a full walkthrough of the OTE entry logic, see the complete ICT Optimal Trade Entry guide and the ICT golden pocket and OTE setup article.
Identifying the OTE entry zone
A valid OTE zone in the ICT method requires three simultaneous conditions:
- Price pulls back into the 0.618-0.705 band after a displacement (impulse candles with small wicks).
- The pullback occurs during a Kill Zone (London: 3:00-5:00 AM UTC, or New York: 12:30-3:00 PM UTC).
- An Order Block or FVG overlaps with the retracement zone.
Higher-timeframe market structure (H4 or daily) must also be aligned. See the ICT market structure beginner guide.
OTE setup invalidation
A retracement that breaches 0.786 without a strong bullish reaction invalidates the setup. Price is likely to return to test the 1.0 level (swing low), which cancels the continuation thesis. Do not enter if 0.786 is broken without visible absorption on lower timeframes.
Invalid OTE setups to avoid
Several chart patterns resemble OTE setups without meeting the full conditions:
- Retracement on a single large candle with no preceding displacement: not institutional.
- OTE signal during the Asian session (10:00 PM - 2:00 AM UTC): reduced reliability outside Kill Zones.
- Missing higher-timeframe market structure alignment.
- Fibonacci drawn on a swing too small to represent meaningful institutional accumulation (less than 20 pips on major pairs).
To backtest your own OTE setups on historical data without writing code, Backtrex lets you visualize and test these confluences across 5-10 years of data in under 30 seconds.
Important Risk Warning
FAQ: ICT Fibonacci settings
ICT retracement levels are: 0, 0.5, 0.618, 0.65, 0.705, 0.786, and 1.0. Extension profit targets are: -0.27, -0.62, -1.0, -2.0, -2.5, and -4.0. Remove all default TradingView levels not in this list (0.236, 0.382) to get the clean ICT configuration. These values come from Michael Huddleston's Inner Circle Trader course series, available on his official YouTube channel.
Place a Fibonacci Retracement on your chart, click it, and select Edit Settings. In the Levels tab, delete 0.236 and 0.382, then manually add 0.65 and 0.705. Add the negative extensions (-0.27, -0.62, -1.0, -2.0, -2.5, -4.0). Save as your default template so the configuration persists across all charts and sessions.
The golden pocket is the 0.618-0.65 zone where price often finds an initial reaction from institutional support. OTE at 0.705 is the deeper retracement level where institutions prefer to accumulate according to the ICT methodology. In practice, both form an entry band: 0.618 offers a higher entry (better price apparent), while 0.705 often provides the final confirmation with a confluent Order Block or FVG.
The -2.5 level (standard deviation 2.5 in ICT terminology) equals two and a half times the reference swing range beyond the swing low. It is used as a profit target during high-momentum sessions, particularly New York Open with a significant macro release, when the daily trend is clearly directional and supported by IPDA liquidity.
Yes. The ICT methodology was developed primarily on major forex pairs (EUR/USD, GBP/USD, DXY indices) but applies to any liquid market: crypto (BTC/USDT, ETH/USDT), indices (SPX500, NAS100), and commodities (Gold XAUUSD). Kill Zone effectiveness is tied to London and New York sessions, making crypto applications less precise on low-liquidity pairs.
No. Configuring ICT Fibonacci in TradingView requires no programming skills. It is a manual level entry in the platform's native settings panel. To backtest complete strategies including OTE, Order Blocks, and FVGs without writing any code, Backtrex offers a visual drag-and-drop editor built for SMC/ICT traders at backtrex.com.
In the ICT method, the stop loss on an OTE setup is placed just below the 1.0 level (swing low on a long trade), with a small buffer beyond the wicks. With an entry at 0.705 and a stop at 1.0 plus buffer, the -1.0 profit target delivers approximately a 1:2 to 1:3 risk-to-reward ratio depending on the size of the reference swing.