What is Balanced Price Range (BPR)?
The Balanced Price Range (BPR) is a derivative concept of the Fair Value Gap (FVG). It delineates a price zone where two opposing Fair Value Gaps (FVGs)—one generated during an upward price movement and the other during a downward price movement—converge and overlap. This distinct overlapping area is precisely what constitutes a BPR, acting as a high-probability reversal zone.
How Balanced Price Range (BPR) Works in ICT Trading Style
How to Identify Balanced Price Range (BPR)?
To accurately identify a BPR, traders must first delineate the premium and discount zones on the price chart. Subsequently, they need to locate two distinct Fair Value Gaps (FVGs) within these identified zones:
- One situated on the sell-side
- One situated on the buy-side
These two FVGs must exhibit a horizontal alignment and manifest in opposite directions. The specific price region where these two FVGs overlap is then confirmed as the Balanced Price Range (BPR).
Formation of Balanced Price Range (ICT BPR) in ICT Trading Style
Importance of Balanced Price Range (ICT BPR)
Initially, a BPR might appear analogous to a standard Fair Value Gap (FVG). However, the fundamental distinction lies in the fact that one of these FVGs undergoes a breach without a significant price reaction, while the subsequent FVG forms within the identical price range where the initial FVG was breached. The overlap between these two FVGs establishes a high-probability zone conducive to trade entries. When the market subsequently retraces to this specific range, traders can execute trades with favorable risk-to-reward ratios.
Conclusion
The Balanced Price Range (BPR) is a cornerstone concept within ICT trading, arising from the overlap of two opposing Fair Value Gaps (FVGs). These zones function as critical market levels for determining optimal entry and exit points. A BPR is definitively validated when the market swiftly traverses through one Fair Value Gap (FVG), and a subsequent FVG forms within the same price vicinity.
