Filtered Displacement

Filtered Displacement is a precision supply and demand tool designed to strictly filter out low-quality zones. Unlike standard Order Block indicators that highlight every minor pivot, this script strictly filters for Displacement—areas where price moved aggressively enough to create a verified imbalance.

How it Works (The Logic): This script uses a strict 3-step pattern recognition system to identify valid zones:

The Origin: Identifies the base candle before a move.

The Displacement: Verifies that the move away was strong enough to Engulf the previous candle.

The Imbalance (Gap): The final filter. A zone is only valid if price moved fast enough to leave a Fair Value Gap relative to the origin. If there is no gap, the zone is ignored.

Key Features:

Auto-Cleanup: By default, zones are automatically deleted from the chart when price touches (mitigates) them. This keeps the chart focused on fresh, untested levels.

Imbalance Verification: Filters out wicks and slow grinds, leaving only zones created by momentum.

Settings:

Colors: Fully customizable.

Remove Zone When Touched: Toggle true (default) to delete zones upon retest, or false to keep them visible (they will turn gray when mitigated).

How to Use:

Green Zones (Demand): Highlights areas of verified bullish displacement.

Red Zones (Supply): Highlights areas of verified bearish displacement.

Disclaimer: This tool is provided for educational and technical analysis purposes only. It does not constitute financial advice. Trading involves significant risk, and past performance is not indicative of future results.