- What Is the ICT Displacement FVG Strategy?
- Why This ICT Entry Model Works
- 3-Step ICT-Based Entry Setup
- How to Identify a Valid ICT Displacement Move
- Entry Trigger: ICT Fair Value Gap (FVG)
- ICT Stop Loss & Take Profit Rules
- ICT Trade Example (Buy Setup)
- Common ICT Mistakes to Avoid
- Summary: When to Use the ICT Displacement FVG Strategy

1. ✅ What Is the ICT Displacement FVG Strategy?
The ICT Displacement + Fair Value Gap (FVG) strategy is one of the most powerful and beginner-friendly entry models from the Inner Circle Trader (ICT) concepts.
It focuses on using:
- Liquidity sweeps
- Displacement candles
- Return to FVG zones
All rooted in smart money concepts taught by ICT.
Detailed video
https://www.youtube.com/watch?v=kYw7zlxTqvA&ab_channel=TheInnerCircleTrader
2025 Storytellers Series – NQ Review June 02, 2025
2. 💡 Why This ICT Strategy Works
This ICT setup works because it aligns with how Smart Money manipulates price:
- First, they induce traders into bad positions via liquidity sweeps
- Then, they displace price to signal direction
- Finally, they offer entry at a fair value gap before continuing the move
This strategy follows the core ICT principle:
👉 “Wait for manipulation, then join the real move.”
3. 📌 The 3-Step ICT-Based Entry Setup
Step 1: ICT Liquidity Sweep
- Price must raid equal highs/lows or a recent swing point
Step 2: ICT Displacement Move
- Strong impulsive candle forms after the sweep
- Must leave behind a clear ICT Fair Value Gap
Step 3: Return to FVG for Entry
- Price retraces into the FVG
- Entry at 50% or 62% of the gap
- Optional ICT CHoCH confirmation on lower timeframe
4. 🔍 How to Identify a Valid ICT Displacement
✅ ICT Criteria | Description |
---|---|
Sweep First | Price must first grab liquidity |
Big Candle | Strong body (not just wick) showing intent |
FVG Created | There must be imbalance left by the move |
Respect on Return | Price respects the gap afterward |
These align with the ICT concept of intention + inefficiency.
5. 🎯 Entry Trigger: ICT Fair Value Gap (FVG)
In ICT terms, a Fair Value Gap is the imbalance between three candles:
- Candle 1’s low
- Candle 2’s body (displacement candle)
- Candle 3’s high
This gap becomes your entry zone — it represents where Smart Money left unfinished business.
6. 🛡️ ICT Stop Loss & Take Profit
- Stop Loss: Just beyond the liquidity sweep
- Take Profit 1: Next relative equal highs/lows
- Take Profit 2: Consequent Encroachment (CE), new imbalance, or OB
These exits follow standard ICT risk management principles.

general displacement image
7. 📈 ICT Trade Example (Buy)
- 1m chart: Price sweeps equal lows
- A large bullish candle breaks structure
- Leaves an FVG between 9:30–9:33
- Price returns, rejects from midpoint
- Entry at 50% FVG
- Target: 15m buy-side liquidity
Textbook ICT FVG entry.
8. ⚠️ Common ICT Mistakes to Avoid
Mistake | ICT Explanation |
---|---|
No sweep before displacement | Not Smart Money driven |
Entering without FVG | No inefficiency = no reason to trade |
Ignoring HTF bias | ICT bias framework is always top-down |
FOMO entry at top of FVG | Lower R:R, higher drawdown |
9. 🧠 Summary: When to Use the ICT Displacement FVG Strategy
- ✅ Ideal for scalping and day trading
- ✅ Works on 1m, 5m, and 15m with HTF confirmation
- ✅ Great for those following the ICT Storyteller Series
- ✅ Perfect beginner model for learning Smart Money Concepts
⚠️ Disclaimer: This content is for educational purposes only and does not constitute financial advice. Trading involves risk, and past performance does not guarantee future results. Always do your own research and consult a licensed financial advisor before making trading decisions.