The ICT Displacement Candle: How to Identify and Trade Them

The ICT displacement candle is one of the most important concepts in the methodology and one of the most misidentified. Here's how ICT defines displacement: A displacement is a strong, impulsive series of candles that create a Fair Value Gap (FVG) — typically 3+ candles with increasing body size, minimal wicks on the continuation side, and a measurable gap between the first and third candle. **What makes it "institutional":** The speed and conviction of displacement candles indicate that a large institutional order just entered the market. Retail traders don't create displacements — only large capital flows do. **What to do with a displacement:** 1. Mark the FVG created by the displacement 2. Wait for price to retrace into the FVG (mitigation) 3. Enter in the direction of the original displacement **Common mistake:** Trading every large candle as a "displacement." True ICT displacement requires the FVG and a specific structural context. **The distinction matters:** A news spike can look like displacement but often fully reverses. True structural displacement has follow-through and is confirmed by the HTF context. How do you distinguish genuine ICT displacement from high-volatility noise?