ICT · 2025-07-29

ICT Part 5: What Is Displacement and Entry Strategies with Displacement

What is Displacement in ICT?

A Displacement Move is the phenomenon of price being pushed strongly out of its current price zone, usually due to a large flow of money entering the market with strong conviction.

Displacement helps identify the direction of Smart Money.

What is Displacement? What is Displacement?

Characteristics of displacement:

How to identify Displacement

What is Displacement?Example of bullish Displacement

The role of Displacement in trading

After finishing identifying the structure, a clearly appearing Displacement is an important signal for making an entry decision.

With a downtrend:

Similarly with an uptrend:

What is No Displacement?

No Displacement (or Lack of Displacement) is the situation where there is no large, decisive candle closing beyond the nearest high or low, or it is a failed Displacement.

What is No Displacement?What is No Displacement?

Lack of Displacement occurs when there is a lack of liquidity from both sides, and it usually appears in a counter-trend corrective wave.

How to identify No Displacement

In an uptrend:

Similarly with a downtrend.

A failed Displacement is No DisplacementA failed Displacement is No Displacement

Displacement is a successful breakout with a strong move, while No Displacement is a false breakout (Fakeout).

Waiting for a Displacement or No displacement before executing a trade is very important because this will help traders track Smart Money and join the market at the right time.

Trading strategy with Displacement

Displacement is an observation factor that helps traders track the direction of Smart Money; it is not an entry model.

In this section we will combine Displacement + FVG + timing to look for a suitable entry time.

Displacement + Bearish FVG

Price breaks old highs and then quickly reverses and falls strongly.

Entering a trade with Displacement and a Bearish FVGDisplacement + Bearish FVG Setup

The steps are as follows:

Example of the Displacement + Bearish FVG setup on the GBPUSD pair:

Displacement module + LVDisplacement + Bearish Liquidity Void

Displacement + Bullish FVG

Price breaks an old low and then quickly reverses and rises strongly.

Displacement + Bullish FVG modelDisplacement + Bullish FVG

The setup consists of these steps:

Example of the Displacement + Bullish FVG setup on ETH/USDT:

No displacement + Bullish FVGDisplacement + Bullish FVG

Combining the time factor with Displacement

If you combine the time factor, the win rate will increase significantly.

The NYO (New York Open) mark is 8:30 AM ET = 7:30 PM Vietnam time in summer, and = 8:30 PM Vietnam time in winter.

To know NYO accurately on TradingView, you should set the time zone to New York (UTC -4). TradingView automatically updates the time by season, so you only need to select the correct time zone, without worrying about changing it manually by season.

Displacement + FVG + NYODisplacement + FVG + NYO

In the example in the figure above, after NYO, price created Displacement taking liquidity but quickly failed, returned, and created an MSS.

The suitable entry point is a Bullish FVG in the Discount Array zone.

Thus, Trading Hub 3.0 has completed the 5 PD Array parts; in the following parts we will go deeper into timing, the most important factor of the ICT method.

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