ICT / SMC Concepts · Lesson 16
Balanced Price Range
Learn how the overlap between opposing Fair Value Gaps creates a new price zone.
What Is a Balanced Price Range?
You already know from the Fair Value Gap lesson that an FVG is a three-candle imbalance.
A Balanced Price Range forms when price creates an FVG in one direction, and later creates an opposing FVG that overlaps part of the original gap. The overlapping portion is the Balanced Price Range.
+ BEARISH FVG
+ OVERLAP
= BPR
NOT AUTOMATICALLY
A REVERSAL ZONE
Step 1: Find the First FVG
This is quick, because you know FVGs. Start with a bullish example: a strong rally, and the high of candle 1 is below the low of candle 3.
< CANDLE 3 LOW
≠ BPR
The First FVG
Price rallies. Where is the imbalance?
Step 2: Price Creates an Opposing FVG
Now price moves in the opposite direction. A second FVG appears, this time a bearish one. It overlaps part of the first.
The Opposing FVG
Same chart. The bullish FVG is green. The bearish FVG will be red.
Step 3: Find the Overlap
They overlap. That shared area is the Balanced Price Range.
∩ BEARISH FVG
= BPR
Build the BPR Step by Step
Bullish FVG, then bearish FVG, then the overlap.
Which Prices Define the BPR?
In words: the BPR starts at the higher of the two lower prices, and ends at the lower of the two upper prices. That is all the maths there is. The BPR is a price area, not one exact price.
No Overlap = No Balanced Price Range
Two opposing FVGs are not enough. Their price ranges have to overlap. Say a bullish FVG covers 100 to 101, and a bearish FVG covers 102 to 103. There is empty space between them.
DOES NOT AUTOMATICALLY
EQUAL BPR
OVERLAP
Quick examples. BPR, or no BPR?
Knowledge check
Example A
A bullish FVG 100 to 103 and a bearish FVG 102 to 104. Is there a BPR?
Knowledge check
Example B
A bullish FVG 100 to 101 and a bearish FVG 102 to 104. Is there a BPR?
Knowledge check
Example C
A bullish FVG 100 to 104 and a bearish FVG 101 to 104.5 overlap strongly. Is there a BPR?
Fair Value Gap vs Balanced Price Range
- Created from
- A three-candle imbalance
- Requires
- One directional displacement
FVG = ONE IMBALANCE
- Created from
- Two opposing FVGs
- Requires
- Overlap between their price ranges
BPR = OVERLAP OF TWO OPPOSING IMBALANCES
Why “Balanced”?
In this framework, traders interpret the overlap as an area where opposing imbalances have interacted. One displacement created an imbalance in one direction. Another displacement created an imbalance in the opposite direction. Their shared area is called a Balanced Price Range.
That is an interpretation. It is not proof of balance in the order book.
What Might Happen on a Retest?
Traders may watch a BPR if price later returns to the overlapping area. Several things can happen there:
Price Returns to the Area
The BPR has formed. Price moved away and is now coming back. The chart is paused.
What area is price retesting?
Balanced Price Ranges can fail
Reaction or Trade Through?
The same BPR. Two different endings.
Common Mistakes
Calling every FVG a BPR
Correction: A BPR requires two opposing FVGs.
Using the full size of both FVGs as the BPR
Correction: Only the overlapping portion counts.
Marking a BPR when the FVGs do not overlap
Correction: No overlap means no BPR.
Using two FVGs in the same direction
Correction: The concept requires opposing FVGs.
Assuming every BPR will react
Correction: The zone can fail.
Knowledge Check
Knowledge check
Check 1
A bullish FVG, then an overlapping bearish FVG. What does the shared area create?
Knowledge check
Check 2
Which part of the two FVGs is the BPR?
Knowledge check
Check 3
Bullish FVG: 100 to 103. Bearish FVG: 102 to 105. What is the BPR?
Knowledge check
Check 4
Bullish FVG: 100 to 101. Bearish FVG: 102 to 103. Is there a BPR?
Your Turn
Find the Balanced Price Range
A bullish FVG, a later bearish FVG and a partial overlap. The labels are hidden.
Which choice is the Balanced Price Range?
Second practice. Two FVGs with no overlap.
Knowledge check
Does a BPR Exist?
A bullish FVG from 100 to 102 and a later bearish FVG from 103 to 105. Does a BPR exist?
How to find a BPR
- Step 1: Find an FVG.
- Step 2: Find a later opposing FVG.
- Step 3: Compare their price ranges.
- Step 4: Find the overlap.
- Step 5: Mark only the overlapping area.
- Step 6: That overlap is the Balanced Price Range.
Where Can BPRs Appear?
Anywhere FVGs appear. No timeframe is universally best.
What You Learned
- A BPR requires two opposing Fair Value Gaps.
- The FVGs must overlap.
- Only the overlapping price area becomes the BPR.
- One FVG by itself is not a BPR.
- Two non-overlapping FVGs do not form a BPR.
- The BPR is an area, not a single price.
- Traders may watch later retests.
- A BPR does not guarantee a reaction.
BPR = THE INTERSECTION OF TWO OPPOSING FVGs. Only the shared area counts.
+ BEARISH FVG
+ OVERLAP
= BALANCED PRICE RANGE