A displacement reaction occurs when a more reactive metal displaces a less reactive metal from its salt solution. The more reactive metal has a greater tendency to lose electrons and form positive ions, effectively taking the place of the less reactive metal in the compound. For example, if an iron nail is placed in a copper sulphate solution, iron, being more reactive than copper, displaces copper. The blue copper sulphate solution fades as reddish-brown copper metal gets deposited on the iron nail, and green iron sulphate forms. The reaction is: $Fe + CuSO_4 \rightarrow FeSO_4 + Cu$. This principle helps determine the relative reactivity of metals.