The Complete Guide to XABCD Patterns
What is a XABCD Pattern?
An XABCD Pattern must contain 3 types of measurements:
- Fibonacci Price Measurements
- Fibonacci Time Measurements
- Frequency Wave Analysis
- What is an XABCD Pattern? - Your new XABCD Indicators if you need it.
- What Markets or Time Frames Work Best?
- There Are Several Categories of XABCD Patterns
- Retracement Time Patterns (RTP - XABCD Patterns)
- Extension Time Patterns (ETP - XABCD Patterns)
- X-Point Time Patterns (XTP - XABCD Patterns)
- Getting More Consistency With Using Time and Price
- The Best Time Frames for Trading XABCD Patterns?
- What software do we use to draw in and automate the XABCD Patterns?
Let's create a list of XABCD Pattern benefits:
- Consistency - Giving you the ability to take a consistent approach in your execution but also in how you approach your trade and risk of every trade.
- Very black / white decisions compared to other methods of training. It's not subjective like Elliot Wave patterns where wave counts would be counted different ways by many people.
- Automating Your Workflow A large portion of the work can be automated since scanning and discovery can be challenging especially to new traders.
Given all the positives around XABCD Patterns, can there be any negatives?
- Learning Curve - While most would think this would take up a huge chunk of time - it doesn't and if the information is presented well, the knowledge can be transferred more easily. So although there is some learning curve it's not as large as it might seem.
Learn to Trade XABCD Patterns - Basic Introduction Course
Below the videos we continue with the text, so if you can't watch the XABCD Pattern videos (bookmark the page to watch them later) but you can continue reading about them below the videos too.
There Are Several Categories of XABCD Patterns
The categories of XABCD patterns can be broken down into retracement, extensions and x-point patterns. Below we have broken them down and have given you a bit of a description about each of them. Finding them can be tricky if doing it on your own and very time consuming as there are approx 11 ratios in each pattern to measure out. Instead we do it automatically with some tools we've created. They also work with audio alerts and other alerting methods so you don't have to waste your time trying to find them but instead just doing your analysis.
What Markets and Time Frames Are Best?
We have done a lot of logging of patterns, and from the data we had collected there has been no difference in markets or time frames. Everything on a 5 minute and above going out to a weekly time frame. Obviously smaller time frames are more frequent than larger ones since you will get more bars on a chart in a day one a 1 minute than you would a 60 minute. There were also no differences in markets. This all makes sense because patterns are created by humans and humans love repeating patterns.
Retracement Time Patterns (RTP Patterns)
RTP Series of XABCD Patterns
XABCD Patterns that fall into the category of RTP patterns all have a D point that does not exceed the X point of a pattern. These patterns will have a D point (where we would like to see price reverse) close to the B point. Different RTP XABCD patterns can be used in channels or ranges so be sure to know which one to use in which situation.
Important Note About RTP XABCD Patterns
These RTP (Retracement Time Patterns) look like M's and W's and are the same geometrical shape with different measurements. They are the same pattern of emotions with different lengths and we look for different ratios.
X-Point Time Patterns (XTP Patterns)
XTP Series of XABCD Patterns
X-Point patterns all have ratios that are based off the X-point of the XABCD pattern. These can also be used in our real time and confirmation mode scanners available to our members. There are two main patterns we scan which are XTP-1 and XTP-2 patterns.
The Best Time Frames for Trading XABCD Patterns
These patterns are based off human emotions and there isn't one time frame that is better than another. That is probably because we are mapping out patterns of human emotions and the traders that are reacting to certain events react the same way if it's a shorter term move (a reaction to a news event), or a longer term move (trade wars etc).
One Difference in Time Frames: Spreads. If you're trading the market like the forex, your spreads can eat into (and change) your trades risk vs reward. This is something you want to watch for because the risk vs reward is a critical metric when analyzing your trades for the month. The higher the reward, the greater the risk. Almost like playing a lotto.
We have traders using our software from tick charts to weekly charts. There are a few minor factors that come into play with the decision making process based off smaller vs larger time frames but this can be easily adaptable once you know what to look for as we go over this in our educational.
More Consistency With Using Time and Price
One thing traders often look for is consistency within the patterns and how you identify that consistency is important. Fibonacci Time Measurements play an important role in XABCD Patterns.
How Time Effects Emotions
Imagine this - you're in an elevator and the breaks fail and you go falling down 30 stories - what sort of emotional reaction would you have? Now imagine the same situation where you're in that elevator and the breaks' don't fail and the doors open in the lobby and you walk out.
In both cases you made it to the lobby of the building - but the emotions you had were very different. Since XABCD patterns map out human emotions then it would only make sense to take time into account in order to get a more consistent pattern.
We have to remember that when you put together an execution plan that if you want to make adjustments you need to make sure all the most consistent patterns possible. That way we can see more clearly the impacts that our changes have on the results pushing forward.
What Indicators are Recommended to Draw XABCD Patterns?
The XABCD Pattern Suite for NinjaTrader 8 is what we have created and built. It supplies traders with a huge advantage to save time in their trading day by allowing them to find and discover patterns automatically.
Want to Learn More About XABCD Patterns?
That is what our membership is for, to answer the "how" questions. This page is to show you "what" the patterns are but now you need to take the next step to learn further about it and invest in yourself. Our Education Center is a great place to start, and our webinars and on-demand mentoring videos are all there to educate you about pattern trading.