A novel linear displacement detected method based on electrical travelling wave generation using alternating light field standing wave is proposed. By modulating the displacement values to the changes of phase difference of electrical travelling wave signal, the spatial displacement is measured by using the method of phase discrimination. In order to optimize the sensor parameters and improve the measurement precision, the error characteristics, caused by light scatting phenomenon, are studied under different parameter conditions. Firstly, according to the characteristics of the sensor structure, measurement error caused by light field distribution is theoretically analyzed and a three-dimensional simulation model is built using the Tracepro software to analyze the light field distribution under different parameter conditions. And then, the relationship between the light field distribution under different parameters and error characteristics is obtained by experimental verification. Finally, the sensing parameters can be optimized based on the simulation and experimental results. The preliminary experimental results prove that the measuring errors of the sensor are controlled within ±0.5 μm for an effective measuring range of 108 mm. A reliable basis of theoretic and technical is provided for the further design optimization and precision improvement of sensor.