Unlocking Trading Insights with X-Points on the EUR/USD Chart

If you’re trading the EUR/USD, you might want to pay attention to a fascinating pattern that can signal potential reversals. These signals, which we call X-Points, can give you a heads-up before a price shift occurs.

What Are X-Points?

X-Points are identified by specific characteristics in the price bars on the chart:

• 1) The rate calculated as (High-Low)/MathAbs(Close-Open) is significantly greater than 1.
• 2) The Low touches the lower border of the channel, suggesting a potential price increase, or the High touches the upper border of the channel, indicating a possible price decrease.

The indicator for finding X-Points uses the following parameters:

• per: Channel building period (default is 3)
• xrate: Minimum rate required (default is 1.5)
• xsize: Minimum bar height, calculated as (High-Low) (default is 5.0)
• xslope: Minimum increment of the next bar (default is 0.0)
• xminupdn: Minimum channel width (default is 10.0)
• xhour1: Start hour for signals (default is 9)
• xhour2: End hour for signals (default is 19)
• xindent: Signal indent from the chart for StopLoss usage (default is 15)

Identifying Signals

As you can see in the chart below, the X-Points (marked with straight arrows) often predict price movements more accurately than other indicators like FATL (denoted by round arrows).

Keep in mind that false signals can still occur, so it’s wise to use additional indicators or view these signals as cautionary alerts against prematurely entering opposing positions.

Time Filtering

The indicator now includes a time filtering feature, which by default ignores new signals. During testing, we discovered that the indent parameter can also be used to refine your entry timings. For instance, you can open short positions when the price is above the arrow, which helps you get closer to local extremum points.

Proven Success with Expert Advisors

Check out the performance of an Expert Advisor developed using this indicator under the conditions of the ATC'2007 model. This EA managed to grow the capital by an impressive 35 times in just three months, with a maximum drawdown of 22%!

In conclusion, X-Points can be a valuable addition to your trading toolkit. By understanding how to identify these signals, you can enhance your trading strategy and potentially increase your profits. Happy trading!