bulldogging is best to start. what bulldogging means is to crouching block, walk forward a little, repeat. do this to get close to Balrog. the Balrog player will often use crouching roundhouse so be careful. try to get close enough that you’re blocking his pokes, or his pokes are barely whiffing.
while you’re bulldogging some balrogs may get impatient and try the dashing overhead special. you’ll have to react and block high. i’ve seen a few Balrogs switch it up and go for the LOW dashing special so pay attention to which one it is. either way, block and SPD (jab version).
try to challenge Balrog’s pokes with your own. at best you will trade hits with him. if he’s spamming crouching lp, your own crouching lp will usually trade or beat it. if he uses crouching roundhouse, use your own cr.HK, df.HK, c.mk to beat or trade. you can use any green hand too.
watch for openings where Balrog drops his charge. if he’s standing up or walking, he has no headbutt! if he’s walking forward or standing still, he has no dash punch charge. you can be a little more aggressive now and jump in, or try to get close with Gief’s forward motion normals (cr.HK, df.HK, c.mk, or HK) since he can’t punish them with dash punches
if you get the life lead, just turtle him! he’ll have no choice but to come at you. that’s a huge advantage for you.
alternatively, you can turtle to begin with.