A normal swing moves in steps, with overlapping candles. Displacement moves in one go: bodies are large, wicks small, and the move is fast enough that candles do not overlap, leaving gaps. It usually breaks out of a range or through a swing.
On its own it is a sign of intent. Traders use it as the condition for a market structure shift, and the gaps and order blocks it leaves as the places to join the move on a pullback.
| Fair value gap | 1.08400–1.08600 · 20 pips · 50% at 1.08500 |
|---|---|
| Entry (long) | 1.08560 — inside the gap |
| Stop | 1.08380 — 2 pips below the gap (18 pips) |
| Target | 1.08900 — the next high (34 pips) |
| Reward to risk | 1.89R · breaks even at a 35% win rate |
EURUSD prices from the chart above (Displacement), entry at 1.08560. At 1.89R, this setup needs to win more than 35% of the time to make money before costs. Try your own levels in the risk/reward calculator.
There is no fixed size: some traders want candles twice the recent average, some look only for a gap. On low timeframes news spikes look like displacement but often fade; many traders ignore moves in the minutes after data releases.
The move itself is not the entry. Buying its last candle puts the stop far below and the entry at the extreme.
One large candle inside a range is noise. Displacement breaks something and leaves a gap.
Strong displacements often return only to the top of the gap. Waiting for the bottom misses many of them.
A definition does not tell you whether your Displacement trades pay. Your own record does: in the journal, open a trade from MT4 or MT5 and add it once as your own entry criterion with “+”, then press the key of Displacement under Entry criteria — the most used criteria get keys 1–9.
Reports then show Displacement by itself: trades, win rate without breakeven trades, average R and P&L, and Displacement in each ICT killzone, which is set on every trade by itself. Combinations such as Displacement with another criterion appear once they have 15 trades, so a lucky streak does not look like an edge.
By size and speed: large bodies, small wicks, little overlap between candles, and at least one fair value gap left behind.
A slow break can be just a stop run. A displaced break shows real orders behind the move, so it is less likely to reverse.
On the pullback into the gap it left, or into the order block where it started, with the stop beyond that zone.