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# Thoughts about Bat pattern. Some tips and secrets. Part IV.

FX:AUDUSD   Australian Dollar / U.S. Dollar
264 9
Hey, traders. It’s Wednesday and we have another edition of “Thoughts about Bat pattern”. Today we’ll continue talking about XA leg. As you remember from previous parts, XA is the MOST IMPORTANT thing in pattern recognition. Last time we discussed X-point location. Today we’ll discuss other points. And also we’ll talk about my way of using Fibonacci retracement tool. Let’s go.
Last time I told you that there’s a special algorithm helping to recognize XA legs. I’m going to reveal the sequence of actions right now.
Step #1. Always keep in mind that most people make their decisions to buy or sell currency without ever seeing charts. All they know is price. In many cases they know some price range. See what I mean? You may argue about impulses and corrections but price moves one tick up because those “most people” have bought all the offers at one-tick-lower price.
Step #2. Look at the last market movements. The final point of this movement is B-point.
Step #3. Look along this movement to its initial point. It’s A-point.
By these manipulations we have established an A to B range.
Step #4. Look left and find a larger range in relation to which the AB range can be called corrective. This larger range MUST end at the same point the smaller range starts from. It’s A-point. This larger range should look like 2 or 1.5 times larger than AB range. The initial point of this larger move is POTENTIAL X-point. Note that potential X point MUST be some sort of structure point. See “Thoughts about Bat pattern . Some tips and secrets. Part III” to find out what I call structure point.
Step #4. Grab your Fibonacci retracement tool. Stretch the tool from potential X-point to A-point. Look at your B-point. Does it touch 50%? If not, then move your potential X-point to a higher structure point (for bull patterns) or lower structure point (for bear patterns). Restretch the Fibonacci retracement tool from this new potential X-point to A-point. Is B-point Ok now? If B-point goes through 50% and touches 61,8% then move your potential X-point to a lower structure point (for bull bats) or to a higher structure point (for bear bats). Restretch the fibs. Is B OK now? Remember: B-point MUST at least touch 50% and never touch 61,8% If there’re no structure points that allow your B-point rest in 50-61,8% range then there won’t be any Bat patterns.
Step #5. If there are more than one structure point allowing B-point rest in 50%-61,8% range, then choose whatever makes XA larger.
Step #6. After you have found a proper X-point placement measure the XA move. How many pips it is? To find out what size of XA move was proven to be optimal see Part I.
Do backtestings to train your eyes. It’s all about practice. If you will practice long enough you will recognize proper XA simultaneously.
what is the bat pattern % of success in your backtesting?

really good explanation ^___^
55-62% depending on the pair, with my targets and average reward to risk of 2.2-2.4:1,
b) some trades hit T1 then hit trailed breakeven stop loss
c) some trades hit T1 then hit a trailled stop loss above break even but not at T2
d) some trades hit T1 and T2

The average is a combination of all of the above.... but the best thing to do is buy forextester 2 for \$150 (trust me it's worth every cent... as you can test something yourself) and then do exactly that...

If you don't do the testing yourself you won't have the confidence to know it makes money and keep going even when things are not going well...

Speaking from experience... had 5 losses yesterday mainly becuase of FOMC shaking up the USD with only 1 win, luckily the win erased most of the other losses but today is looking much better with a win about to hit target which will make up yesterdays losses and then some...

Do the work yourself... it's the only way to trust it
dionvuletich
thank a lot DionV
that s the next pattern to test
currently i m backtesting gartleys on majors
It's 52% on eurusd, 52% on gbpusd and 53% on audusd. 50+% it hits 0,382AD before it hit 1,113XA. It's 23% on eurusd, 24% on gbpusd and 27% on audusd. 20+% it hit 0,618AD before it hit 1,113XA or breakeven. Note, that I trade 5M to H1 TF. Because of the specific XA size.
For example, you use fixed fractional MM. You only risk 1% per trade no matter what size your account is. Also no matter what size XA means. Always 1%.
Eurusd after 100 trades (a - T1, b - T2):
a) 1*48=48% It is total loss
1,3*52=67,6% It is total win
b) 1*48=48% It is total loss
2,2*23=50,6% It is total win
29% left zeroes.
Summary:
Total loss is 96%. Total win is 118,2%. Net Profit is 22,2%.
That's why I do what I do the way I do it))

Alexander_Nikitin
WOW!!! couldn't ask for a better reply!!! thank you very VERY much. Just love your way of thinking hope to get there soon. Absolutely awesome. thank again... when is the next episode coming haha :D
Next Wednesday Part V comes)
Alexander_Nikitin
hmm my math might be off, but if you're hitting the 38.2% ~50% of the time and only hitting the .618% ~20% of the time, shouldn't you just close the trade completely at the 38.2?
riskmode
I think this is valuable but possibly a little too specific, bats are my favourite pattern and it depends on what you tested but I don't limit it to 50%... if there is a cluster at 88.6% I take it..

Keep up these posts I think newer traders will get some good value from them
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