Balanced Price Range

The rules

1. Gap one: a real 3-candle fair value gap in one direction.
2. Gap two: a real 3-candle gap in the opposite direction, through the same prices.
3. The zone: only the overlap of the two gaps, not either full gap.
4. Bias: the newer gap decides it. Bearish newer gap means look for shorts.
5. Treat it as a watch zone: wait for price to return and react before acting.
6. No overlap, no BPR. Two gaps that don't share prices are just two gaps.

How to mark it

1. Mark the first gap: candle 1 high to candle 3 low (bullish).
2. Mark the second gap: candle 1 low to candle 3 high (bearish).
3. Shade only the prices both boxes share. That's the BPR.
4. Read the bias from the newer gap.
5. Wait for price to come back into the overlap and reject.

The 1:3 trade

Entry at the lower edge of the overlap as price trades back into it. Stop above the overlap. Target the low the sell-off left. Reward is exactly three times the risk.

Before you enter

• Both gaps are real 3-candle gaps
• The two gaps share a price range
• The newer gap points the way you trade
• Price returned into the overlap and rejected
• Stop beyond the overlap, target the next low or high

Common mistakes

• Using the whole first gap instead of the overlap
• Trading against the newer gap's direction
• Calling two gaps a BPR when they never overlap
• Entering before price actually reaches the zone
• Placing the stop inside the overlap

Key terms

• BPR: overlap of a bullish and a bearish fair value gap
• Fair value gap: 3-candle imbalance where price moved one way
• Bullish FVG: candle 1 high below candle 3 low
• Bearish FVG: candle 1 low above candle 3 high
• Bias: the direction you look to trade
• R:R: reward divided by risk; 1:3 means 3R for 1R risked

Two gaps, one overlap. The newer gap picks the direction.