What it means
A balanced price range is the overlap between a bearish fair value gap and a bullish fair value gap formed in quick succession at the same prices. Price moved fast down and then fast up through the same area.
Only the overlapping part is the BPR.
Why traders use it
The overlap has been crossed aggressively in both directions, so traders treat it as a strong rebalancing area where price may react when revisited.
Chart examples
Bearish gap, then bullish gap: the overlap is the BPR
How to identify it objectively
- 1Find a bearish FVG and, shortly after, a bullish FVG (or the reverse).
- 2Draw both zones.
- 3The BPR is the price range shared by both.
- 4If there is no overlap, there is no BPR.
Bullish use
- 1The bullish gap formed last (price is now moving up).
- 2Price retraces into the BPR.
- 3A bullish close there supports continuation.
Bearish use
- 1The bearish gap formed last.
- 2Price rallies into the BPR.
- 3A bearish close there supports continuation down.
What confirms it
- A clear overlap.
- Reaction on the first revisit.
What invalidates it
- A full close through the BPR against the latest move.
How a hypothetical setup is built
Entry
On the first retest of the BPR with a close in the direction of the last displacement.
Stop
Beyond the BPR.
Target
The extreme made after the second gap.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
- Fair Value Gaps & Order BlocksInverse Fair Value Gap (IFVG)
- LiquidityLiquidity Void
- Fair Value Gaps & Order BlocksOrder Blocks
Historical testing
Not tested on The Tradeskill yet.
Limitations: when it fails
- BPRs are rare and often small.
- The overlap can be a few ticks wide, leaving no room for a sensible stop.
- Low-timeframe BPRs are noise.
Knowledge check
Pick an answer to see the explanation. Nothing is saved.