The Bat Pattern

Step 1: The XA Move

The first step in identifying a Bat pattern is to find an impulse or anchor leg (XA). Once the initial
move is created and identified then we can start to look for the rest of our criteria to be met.

Step 2: The AB Move

After our initial (XA) move we will look for price action retrace and complete a valid (B) leg
move. For the (B) leg to be valid price action must retrace to a minimum of 50% of (XA) and not
touch the 61.8% (XA) Fibonacci retracement.

Step 3: The BC Move

Once our (AB) leg is complete we can now look for a valid (C) Leg. The market creates a valid (C)
leg by completing at least a 38.2 retracement of the (AB) leg. This leg is considered valid as long
as price action does not move beyond the (A) leg.

Step 3: The D Completion

The (CD) leg of the Bat pattern is simple. A Bat pattern D completion is always at the 88.6
Fibonacci retracement of the original impulse/anchor leg or (XA).
Entries, Stops and Targets

Entries: As with most advanced patterns, the recommended entry for this pattern is an aggressive limit
order. In the case of the Bat pattern the completion area is always the 88.6 Fibonacci retracement of the
(XA) leg.

Stops: I will go over a few different options for stops in our training, but a cardinal rule is that stops
NEED to be BEYOND the X leg.

Target 1: Target 1 is the 38.2 retracement of the (AD) leg. If targets are obtained, then stops move to
breakeven.

Target 2: Target 2 is a 61.8 retracement of the (AD) leg.

*After entry, if price action continues, Fibonacci retracements should be adjusted to the highest/lowest
(D) point