What it means
Displacement is an unusually strong directional candle (or sequence of candles) that creates a clear shift in market structure — often with an FVG inside it. The candle body is materially larger than recent average (≥1.5 standard deviations against 20-period range). Displacement signals institutional flow with conviction; the candles that precede it often become order blocks (the last opposite-color candle before the displacement).
Why it matters
Displacement is the visual marker that institutional flow has taken control. Identifying displacement helps mark the high-conviction order blocks (the candle before the displacement) and FVGs (within the displacement) for trading future retests.
How to use it
Watch for displacement candles: large directional move ≥1.5 SD above 20-period range, often with volume expansion. The candle BEFORE the displacement is the order block; gaps within the displacement are FVGs. Trade reactions on retest of these zones.
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