← All concepts

Displacement

An impulsive, high-energy move: a candle or series of candles far larger than recent ranges, often read as a sign of institutional participation.

What it is

Displacement is a burst of directional order flow: a candle whose body dwarfs the recent average (often measured against ATR), typically breaking structure and leaving Fair Value Gaps behind. It separates a genuine change of intent from ordinary back-and-fill rotation.

Why it matters

After a liquidity sweep, displacement is the confirmation. Sweep without displacement is chop; sweep plus displacement is a setup.

NQ example ILLUSTRATION

After sweeping a session low, NQ prints a full-bodied 45-point up candle on expanding volume. That displacement is what traders read as the sweep being accumulation, not continuation lower.

Related concepts

See Displacement on a live chart

Upload any chart to Edge Engine and the AI will mark the structure, levels, and liquidity. Free, no card required.