Displacement: why speed is part of the signal
Posted: Sun Oct 25, 2026 8:57 am
Two breaks of structure can look identical on a line chart but behave completely differently. One was a slow grind of small candles, the other was three large candles in a row with almost no overlap. The second is displacement, and it tells you something the first does not: there was aggressive participation, not just drift. I use a simple measure. A break counts as displacement if the candles that created it are larger than the average range of the last twenty candles and they leave an imbalance behind, often a fair value gap. Breaks without that tend to retrace deeply or fail. This matters for order blocks too, since the zone before a weak move is not worth trading. I also noticed displacement is more reliable during London and New York opens than during dead hours, where a single large candle can be nothing more than thin liquidity and a wide spread. Speed alone is not proof, but its absence is a good reason for caution.