ICT Displacement + FVG Strategy: The Fastest Smart Money Entry Explained

ICT Displacement + FVG Strategy: The Fastest Smart Money Entry Explained

  1. What Is the ICT Displacement FVG Strategy?
  2. Why This ICT Entry Model Works
  3. 3-Step ICT-Based Entry Setup
  4. How to Identify a Valid ICT Displacement Move
  5. Entry Trigger: ICT Fair Value Gap (FVG)
  6. ICT Stop Loss & Take Profit Rules
  7. ICT Trade Example (Buy Setup)
  8. Common ICT Mistakes to Avoid
  9. 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 CriteriaDescription
Sweep FirstPrice must first grab liquidity
Big CandleStrong body (not just wick) showing intent
FVG CreatedThere must be imbalance left by the move
Respect on ReturnPrice 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

MistakeICT Explanation
No sweep before displacementNot Smart Money driven
Entering without FVGNo inefficiency = no reason to trade
Ignoring HTF biasICT bias framework is always top-down
FOMO entry at top of FVGLower 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.

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