Displacement
Also called impulse. What it means, how it looks on a gold (XAUUSD) chart, and the mistake most traders make with it.
Displacement: Displacement is a strong, fast move made of large-bodied candles that usually leaves fair value gaps behind. ICT treats it as the footprint of large orders.
Displacement on a gold chart
After CPI, gold drops $25 in three 5-minute candles, from $4,148 to $4,123, each closing near its low. That is displacement; the gaps it leaves are where sellers might re-enter on a pullback.
How traders use it
A market structure shift only counts if it was made with displacement. Traders also use it to judge which side is in control.
Common mistake
Mistaking a single news spike that fully reverses for displacement. The candles should close strong, not leave long wicks.
Questions
What does displacement mean in trading?
Displacement is a strong, fast move made of large-bodied candles that usually leaves fair value gaps behind. ICT treats it as the footprint of large orders.
How is displacement used on gold (XAUUSD)?
A market structure shift only counts if it was made with displacement. Traders also use it to judge which side is in control.
Educational content, not financial advice. Every concept here is a probability, not a guarantee.
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