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ICT concepts provide logical framework for trading financial markets. ICT Balanced Price Range helps trading accurately. This concept is associated with the concept of Fair Value Gap and Inverse Fair value Gap. The logic and psychology behind this concept improves success ratio in trading. This concept is also used along with other ICT concepts. Market Structure and Daily Bias should be accurate in every case.
This article explores its basic understanding and logic behind ICT Balanced Price Range, its appearance in bullish and bearish market, and trading with BPR.
Understanding ICT Balanced Price Range
The ICT Balanced Price Range (BPR) describes a zone in the market where buying and selling activity achieves equilibrium. It is an important area for traders because the range represents a transition between accumulation and distribution phases or vice versa. The BPR highlights areas of interest where liquidity imbalances might resolve and future price movements may initiate.
In efficient market movement, there are equal number of buyers and sellers. Fair Value Gap represents inefficiencies in the market. ICT BPR pinpoints areas of equilibrium on a price chart. It specifically refers to the zone created by the overlap of two opposite FVGs. Fair Value Gaps are created because of one-directional price movement. This makes the market inefficient. The second strong price move do not respect the FVG of first and break it with strong candle. The second strong move leaves another FVG. The overlapping area of two opposite FVG (one bullish and one bearish) is the area of Balanced Price Range.
The price gaps represent zones of inefficiencies where price moved too quickly. It leaves unfilled orders behind. Balanced Price Range represents efficiency in the market and signals a balance between buyers and sellers. It is an indication that the market has corrected previous inefficiencies.
Bullish ICT Balanced Price Range
The Bullish ICT Balanced Price Range is used to identify high-probability buying opportunities. Bullish BPR is established on the buy side of price. The overlap of bullish and bearish FVG creates a zone of equilibrium. This zone is used to execute trades in alignment with a bullish trend (supported by market structure).
Identification and Trading of a Bullish ICT BPR
The following points should be considered in trading with bullish BPR:
- Ensure the overall market structure is bullish. Market moves by creating higher highs and higher lows on the higher timeframes. This indicates that the market is in an uptrend. Within an ICT dealing range, confirm the presence of Bullish PD Array.
- When price approaches the bullish PD Array, shift in lower timeframe and look for Market structure shift. This indicates reversals of momentum in favor of bulls.
- Here, Identify a bullish BPR. Look for a bullish FVG that overlaps with a bearish FVG. This overlap creates a bullish ICT BPR. Ensure that the overlapping area lies within the discount zone of the price range. The discount zone offers favorable buy opportunities.
The bullish ICT BPR act as a magnet for price due to its dual role as an inefficiency resolution zone and a liquidity area. Traders leverage it to align their entries with institutional flows.
Bearish ICT Balanced Price Range
The Bearish ICT Balanced Price Range is used to identify high-probability sell opportunities. Bearish BPR is established on the sell side of price. The overlap of bearish and bullish FVG creates a zone of equilibrium. This zone is used to execute trades in alignment with a bearish trend (supported by market structure).
Identification and Trading of a Bullish ICT BPR
The following points should be considered in trading with bearish BPR:
- Ensure the overall market structure is bearish. Market moves by creating lower lows and lower highs on the higher timeframes. This indicates that the market is in a downtrend. Within an ICT dealing range, confirm the presence of bearish PD Array.
- When price approaches the bearish PD Array, shift in lower timeframe and look for Market structure shift. This indicates reversals of momentum in favor of bears.
- Here, Identify a Bearish ICT BPR. Look for a bearish FVG that overlaps with a bullish FVG. This overlap creates a bearish ICT BPR. Ensure that the overlapping area lies within the premium zone of the price range. The premium zone offers favorable sell opportunities.
The bearish ICT BPR act as a magnet for price due to its dual role as an inefficiency resolution zone and a liquidity area. Traders leverage it to align their entries with institutional order flow.
Final note
The ICT Balanced Price Range is a powerful concept used in trading requiring patience, precision and thorough market analysis. It is advised to confirm trade setups like market structure, PD Arrays, and liquidity. Remember, ICT works on high probabilities that is why there is a space for failure. No strategy in trading guarantee success.
Trading involves significant risk and is not suitable for all investors. Always use proper risk management, and never trade with the capital you cannot afford to lose. It is advised to seek professional mentorship before live trading.
Frequently Asked Questions (FAQS)
What is the ICT Balanced Price Range (BPR)?
The ICT Balanced Price Range is a specific price zone formed by the overlap of two opposite Fair Value Gaps (FVGs)—one bullish and one bearish. It represents a market equilibrium where prior inefficiencies are balanced, and institutional traders may look to enter or exit positions.
What is the purpose of using BPR in Trading?
Traders use BPRs to identify high-probability entry zones. The BPR helps anticipate where price is likely to react, consolidate, or reverse, as it represents a balance of liquidity and previous order flow activity.
What is the difference between Bullish BPR and Bearish BPR?
Difference between them arises because of two different market conditions. A Bullish BPR is formed on the buy side of price and is used for long (buy) trades. A Bearish BPR is formed on the sell side of price and is used for short (sell) trades.
I’m Abdullah Shah, a content writer with three years of experience in crafting engaging and informative content. My background in market analysis complements my work, allowing me to create content that resonates with audiences. I’m also a seasoned practitioner in the forex and crypto markets, with a strong foundation and deep interest in finance. My passion for the financial world drives me to produce content that is both insightful and valuable for those interested in understanding market trends and financial strategies.
