Defining A True Balanced Price Range (ICT BPR)

Summary

This video walks through five key steps for identifying a true balanced price range (BPR) in trading. It covers removing wicks from candlesticks, marking imbalances, finding consolidation areas, and adjusting for premium entry points. By utilizing tools like the gam box and understanding price reactions to imbalance areas, traders can identify high-probability setups and make precise entries and exits. The method aims to deliver consistent results by focusing on areas of imbalance, consolidation, and balance, offering a structured approach to scalp trading with clear strategies and risk management.

Takeaways

• 😀 Step 1: Remove wicks from the candlestick chart to focus on the candle bodies and get a clear picture of the price action.
• 😀 Step 2: Identify areas of imbalance on the chart by marking regions where there is a void of opposite candles.
• 😀 Step 3: Look for areas of consolidation at the top or equilibrium points of the imbalance, indicating a balanced range.
• 😀 Step 4: Re-enable the wicks to help identify premium entry points for trades, specifically when wicks move into the premium area of the imbalance.
• 😀 Step 5: If no wicks come into the premium zone, move the gam box to the next area of imbalance to look for new entry opportunities.
• 😀 Step 6: After identifying entries, monitor price movements toward areas of imbalance and adjust stop losses accordingly.
• 😀 Step 7: Use candle bodies and wick behavior to determine ideal entry points, waiting for clear signals before taking a trade.
• 😀 Step 8: Aim for high-probability scalp setups, making precise entries and exits based on balanced price ranges.
• 😀 Step 9: Exit 80% of the position once the first area of imbalance is balanced, leaving the remaining position to capture further price movements.
• 😀 Step 10: The key to a true balanced price range (BPR) setup is recognizing areas of imbalance, consolidation, and price rebalancing, which leads to high-probability trades.

Q & A

What is the purpose of removing the wicks in the first step?

Removing the wicks helps to focus only on the candle bodies, providing a cleaner view of the price range without the distraction of wick movements. This is important for identifying the true balanced price range (BPR).

How do imbalances in price get marked in the script?

Imbalances are marked by identifying areas where there is a lack of opposite candle bodies. These are marked using a gambox, which highlights the void areas between opposing candles, showing the imbalance.

What role does the Gambox play in identifying price imbalances?

The Gambox is used to visually highlight imbalances by marking areas between opposing candle bodies. It also includes a 50% line, which is useful for identifying key price reactions as the market moves through different times of the trading session.

What is meant by the term 'equilibrium point'?

The equilibrium point refers to the area where the price has balanced itself out between the imbalances, typically where price consolidates and shows signs of returning to this level for future moves.

Why is it important to observe areas of consolidation?

Areas of consolidation indicate where price has balanced and is likely to revisit. These areas are important as they often set up potential entry points for trades when price returns to these levels.

What happens after a price rebalances an area of imbalance?

Once price has rebalanced an area of imbalance, it creates an area of consolidation. These consolidation zones are critical for identifying future trade opportunities, especially when price moves to and from these zones.

Why is step four crucial for finding entry points?

Step four is crucial because it involves turning the wicks back on, allowing you to spot potential entry points in the 'premium' zone, which is identified by the wicks touching the upper part of the Gambox. This helps in placing precise entries for trades.

What does the term 'premium' refer to in this context?

'Premium' refers to the upper part of the Gambox range, where price has a higher probability of reacting, often leading to profitable trades. Entries are considered when price moves into this premium zone.

What do you do if there is no wick reaching into the premium zone?

If there is no wick touching the premium zone, you move the Gambox to a new balanced range where wicks are reaching into the premium zone. This helps in finding new potential entry points.

What is the final step in the process, and why is it important?

The final step involves summarizing the entire process and adjusting for potential entry points after ensuring candle bodies are not closing at equilibrium. The goal is to identify high-probability setups with specific entries and exits, ensuring a more reliable scalp trade.