Understanding the Role of Displacement in Price Action
Displacement refers to a strong and decisive price movement that shows a shift in trading activity.
In ICT and SMC analysis, traders often look for displacement when identifying potential changes in market structure.
Common characteristics include:
- Large directional candles.
- Strong price expansion.
- Breaking of meaningful swing points.
- Formation of an imbalance or Fair Value Gap.
However, a large candle alone does not confirm institutional activity.
Remember: Displacement becomes more useful when it occurs at an important market location.
Do you wait for displacement before confirming a Market Structure Shift?
