The second argument to balred specifies the target approximation order.
By default, balred discards the states with the smallest Hankel singular values, and alters the remaining states to preserve the DC gain of the system. Setting the StateElimMethod option to Truncate causes balred to discard low-energy states without altering the remaining states.
Compare the frequency responses of the original and approximated systems.
When working with reduced-order models, it is important to verify that the approximation does not introduce inaccuracies at frequencies that are important for your application.