Displacement

Engine internals · The energy filter every setup has to pass

Published 24 Jul 2026 · every rule box checked against mechanization v1 (frozen 16 Jul 2026) · parameter changes land in the changelog first

In three sentences

Displacement means one candle body at least 1.5x the average body of the prior 20 bars.
It is the single filter that separates a structure break with conviction from drift.
No displacement means no MSS, no order block and no qualified FVG — the whole sequence stops.

What it is

Every ICT-style sequence eventually asks one question: did that move mean anything? Displacement is this engine's answer, expressed as arithmetic rather than adjectives. A leg displaces when at least one candle body dwarfs recent bodies — not because big candles are magic, but because a body that size is evidence that one side cleared the book instead of drifting.

Mechanization v1 A bar shows displacement when |close - open| >= 1.5 x the mean of |close - open| over the prior 20 bars. The check runs on closed bars only. Displacement is required in the MSS leg, and the same leg must leave a fair value gap; order blocks are only recorded when the following leg satisfies both conditions.

Where it sits in the chain

Displacement is not a signal — it is a gate placed in front of three other concepts. A structure break without it is not an MSS. A three-candle gap without it is not a qualified FVG. An opposite candle without it is not an order block. That is why one parameter can quietly halve the number of signals a week produces.

Common misuse

Judging displacement by eye, chart by chart, which reliably finds it wherever you already wanted a trade. Relative-to-recent-average is boring and mechanical, and that is the entire point.

Common questions

Why 1.5x and not some other multiple?

It was fixed before any data was collected and frozen with mechanization v1. That number can be wrong, but it cannot be tuned after seeing results — changing it creates a new version with a dated changelog entry.

Is displacement the same as a big candle?

It is relative, not absolute: the same 200-point candle passes in a quiet market and fails in a volatile one, because the yardstick is the recent 20-bar average body.

What if a move is strong but has no gap?

It does not qualify. The engine wants both energy and the inefficiency it leaves behind, because the gap is what later becomes the entry.