The theory behind these is that price, market making capable institutions will hedge their positions, and recoup as price slices the injection area.

Just like a shift zone, these displacements can act the same way.

Bearish example;

Here we see a sliced displacement, just like with a shift zone, where price goes through and comes back.

Below you will notice the same displacement, notice how it was in the discount array of the dealing range, and once it was sliced it acts as a short-term premium.

Here you can see the new dealing range, as price has taken that low.

Bullish Example;

Price comes through, slices the displacements, and comes back to test it.

As you can see, with the move it created, the displacement was firstly in the premium aspect of the dealing range.

In diagram examples to remember easily, they look like this side to side.

These displacements can stay active for a certain period of time.

Keep them in the range of roughly 30-40 days. No more than 60 days though.

This is when the effect is the strongest and acts as a confluence layer to overlap your other PDA’s.

If you mark every displacement there is, it will be a lot of noise and your focus will not be honed in.