We use x-bar structure in syntax especially because it helps us to show differing levels of constituency. In X-bar structure, ‘X’ stands as a variable, which can be replaced with whatever syntactic category the head of that Phrase is. The ‘X’ in your XP should always match the syntactic category of the head (i.e. X) of that Phrase. There are always three levels that must be represented for each phrase:

We refer to these different levels as Phrase-level (XP), Bar-level (X’), and Head-level (X). These different levels stand for different nodes where other phrases can branch off from the overall Phrase. We have specific terms for the different positions, depending on what node that phrase is branching from:

Note that again, each Phrase is represented by a different variable (W, X, Y, or Z). We often refer to the structure in kinship terms, where the main node is the ‘mother node’ which branches into two ‘daughter nodes’. For example, YP is a daughter of XP and a sister to X’. The Modifier’s Phrase (WP) is the daughter of X’₁ and a sister to X’₂ . Every mother node indicates that the daughter (and granddaughter, etc.) nodes below it are required. For example, in the Noun Phrase “The lazy man with the dog”, we think that ‘the’ isn’t just specifying ‘man’, but ‘lazy man with the dog’. And lazy isn’t just modifying ‘man’, but is modifying ‘man with the dog’.

Some rules and things to keep in mind:

You should never have three things branching off of two nodes unless you have certain circumstances (i.e. things like conjunctions), 

Modifiers show information that is optional (hence why the extra X’ node that modifiers attach to is only necessary to draw when there is a modifier present), but complements are things that are required by the Head of the XP. For example, You can add as many modifiers as you want to the NP the man (e.g. the lazy man; the lazy, no-good man; the lazy, no-good, handsome man) and they add information about the head man, but they aren’t necessary. But the complement of a VP  like hit the judge, is required (you have to have an object that has been hit, you can’t just have hit).