Balanced price range in gold trading

A balanced price range (BPR) forms when price creates a fair value gap in one direction and then, moving back, creates an opposite fair value gap that overlaps it. The overlapping area has been traded through quickly twice, once each way. ICT describes it as a zone where price has been “balanced” and often reacts strongly on a return.

How it applies to gold trading

Gold’s sharp V-shaped moves around news and session opens create BPRs regularly: a fast drop leaves a bearish FVG, then an equally fast recovery leaves a bullish FVG over the same prices. Traders mark only the overlap and look for entries there in the direction of the latest move, with a stop beyond the zone.

Because the overlap is often narrow, BPRs offer tight stops. The same narrowness means they can be pierced easily, so they work best aligned with higher-timeframe bias.

Worked example

Example (hypothetical numbers): gold drops from 4,025 to 4,000, leaving a bearish FVG from 4,018 to 4,010. It then rallies to 4,030, leaving a bullish FVG from 4,008 to 4,015. The overlap, 4,010 to 4,015, is the BPR. On a pullback a trader buys at 4,014 with a stop at 4,007 and targets 4,040.

A common mistake

Calling any two nearby gaps a BPR. The gaps must overlap in price and be in opposite directions.

See also: Fair value gap, Inverse fair value gap, Imbalance, PD array.

Frequently asked questions