Blade tip timing (BTT) measurement technology is more widely used to determine the vibrational stress of rotating blades and play an important role for blade service life prediction. The dynamic blade displacements can be measured by tip timing sensors, and then be converted to blade stress by the modal shape information from finite element method (FEM) analysis. However, there are always two uncertainties between the measured displacements by BTT and the modal shape by FEM analysis. First, the effective positions detected by sensors may shift from where they expected due to the deformation of the blade. This deviation may yield calibration factors with deceptions, which will present an inaccurate correlation for the blade stress level and the tip displacement. Second, when vibrating, blade tip would actually oscillate around the equilibrium position both in circumferential and axial direction, while the sensors can only detect the movements along the circumference direction and neglect the other. This causes the measured displacements to be different from the actual displacements. To deal with these two problems, a novel method based on the vibration amplitudes of blade tip along axial direction is proposed to identify the effective detected position. The vibration stress of the whole blade then can be determined by linking the modified displacements to the mode shape information from finite element (FE) predictions. This method is validated by a numerical BTT simulator, which is trying to simulate the actual testing process of BTT measurement. Both synchronous and asynchronous vibrations are discussed to illustrate the applicability of this method. Moreover, sensitivity analysis is performed to identify the uncertainties from the vibration amplitude and mode shape inaccuracies. Results demonstrate the great potential of the method for vibration stress determination.