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Displacement in ICT: what a strong move tells you

Displacement is a fast, one-sided move that leaves gaps behind. See how the engine measures it with ATR, why it matters for MSS, and how to avoid false reads.

2026-10-22 · 4 min read · by the ICC Charts team (how we write)

Not every break of a high or a low means the same thing. Sometimes price creeps through a level in small, overlapping candles. Sometimes one or two large candles tear through it and leave gaps behind. ICT traders call the second kind displacement. It is one of the simplest ways to tell a real shift in order flow from noise.

What displacement means

Displacement is a strong, one-sided move: one or a few candles with big bodies, small wicks and little overlap. It shows that one side was aggressive enough to push price away fast. The moves that matter most are the ones that also break something, such as a recent swing point or a liquidity level.

Two things usually come with it:

How the ICC Charts engine measures it

"Strong" is a feeling on a chart, so the engine turns it into a rule that can be checked. A candle counts as displacement when both of these are true:

  1. Its body is at least 1.5 times the ATR (average true range, 14 candles). The ATR used is the one from the previous candle, so a huge candle cannot raise its own yardstick.
  2. The body is at least 60 % of the candle's full high-to-low range, so most of the candle is body and not wick.

A bullish candle that passes both tests is a bullish displacement; a bearish one is bearish. You can switch this on in the terminal with the Displacement + VI layer, which draws a marker on each displacement candle.

A gold example with numbers

XAUUSD on the 5-minute chart, ATR about $2.00:

  1. Price sweeps a low at 3,990, then closes back above it. That is a liquidity raid on the sell side.
  2. The next candle opens at 3,991 and closes at 3,996, with a high of 3,997. The body is $5, more than 1.5 × $2 = $3, and $5 of a $6 range is about 83 % body. That is a bullish displacement.
  3. Compare it with a candle that opens at 3,991 and closes at 3,993 with a high of 3,997 and a low of 3,989. The body is $2, under $3, and only 25 % of the range. It is a normal candle, not displacement.

The numbers are only an illustration. The point is that the rule does not depend on how the candle looks to you today.

Volume imbalance, the quieter cousin

A fair value gap needs a gap between the wicks of candles one and three. A volume imbalance (VI) is smaller: two neighbouring candles whose bodies do not overlap, while their wicks still touch. In the engine, a bullish VI is the area between the body top of the first candle and the body bottom of the second. The same layer draws these as grey boxes labelled VI. They show that the move was quick, and traders watch them as small areas where price may react when it returns.

Why displacement matters in a setup

Common mistakes

Practise it

Open any chart in the terminal, turn on the Displacement + VI layer together with Market Structure, and scroll back through a few days. Count how many structure breaks had a displacement candle and how many did not, and note what price did next. You can also train your eye with the free Chart Challenge, which uses real candles.

Education only. ICC Charts is not affiliated with Inner Circle Trader (Michael J. Huddleston); these ideas are explained in our own words. Displacement is not a signal on its own. Trading involves risk; practise on a demo account first.

Try it on a live chart

Open ICC Charts in your browser, free, with the ICT and VSA layers and the model scanner. Or practise on past charts in the free Chart Challenge game.

Open the terminal → Play the chart game

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