What Is Change of State of Delivery (CSD) in Forex Trading?

In Forex trading, change of state of delivery (CSD) refers to a shift in the direction or behaviour of price delivery, indicating that the market may be transitioning from one type of price movement to another.

In ICT (Inner Circle Trader) and Smart Money Concepts (SMC), this is often associated with a change in market structure and order flow.

1. What is a Change of State of Delivery?

It occurs when price stops delivering in its previous direction and begins delivering in the opposite direction.

For example:

• Bullish to bearish: Price was making higher highs and higher lows, but begins delivering lower lows and lower highs.
• Bearish to bullish: Price was making lower lows and lower highs, but begins delivering higher highs and higher lows.

2. Types of Change of State of Delivery

A. Bullish Change of State of Delivery

• Market is initially bearish.
• Price takes sell-side liquidity (SSL).
• Price shows strong bullish displacement.
• Price breaks a previous short-term high.

This suggests a possible shift from bearish to bullish delivery.

B. Bearish Change of State of Delivery

• Market is initially bullish.
• Price takes buy-side liquidity (BSL).
• Price shows strong bearish displacement.
• Price breaks a previous short-term low.

This suggests a possible shift from bullish to bearish delivery.

3. How to Trade It

A simple approach:

1. Identify the existing market direction.
2. Look for liquidity being taken.
3. Watch for displacement in the opposite direction.
4. Look for a market structure shift (MSS).
5. Wait for price to retrace into a fair value gap (FVG).
6. Look for confirmation before entering a trade.

4. Important Difference

Key takeaway: A change of state of delivery suggests that the market may be shifting from bullish to bearish delivery or vice versa. It is more reliable when supported by liquidity sweeps, displacement and market structure shifts.