Displacement is a rapid, one-directional price move composed of unusually large candle bodies, strong enough to leave fair value gaps and break short-term structure in its path. In ICT-style trading it is read as evidence of institutional conviction — the market being moved, not drifting.
There is no universal mechanical threshold, but rule-based versions typically require some combination of: a candle body several times the recent average (or a multiple of ATR), one or more fair value gaps created by the move, and a break of a nearby swing level. Without a fixed numeric definition, “displacement” quietly becomes whatever move already worked in hindsight.
Functionally, displacement is a qualifier rather than a signal: traders use it to validate the structures it creates — an order block or FVG born from displacement is considered higher quality than one formed in quiet, two-sided trading. Definitions vary by teacher, so test the exact version you intend to trade.