As the other guides state, hit A,B,X and Y at the same time to go into X-Factor.
I just wanted to post this to give a bit of extra info about X-Factor so it might help you out in knowing when the right time to use it would be.
X-Factor is dependent on how many characters are still standing on your team. A full team of 3 will give you less benefit then having only 1 character standing would.
Here is a breakdown of the benefits depending on how many characters are standing when you activate X-Factor.
3 characters standing- X-Factor will last for 10 seconds, will give your damage an increase of 120-160%(depending on your character) and will give you a speed increase of 100-125%(also character dependent)
2 characters standing- X-Factor will last for 15 seconds, will give your damage an increase of 135-180%(character dependent) and will give you a speed increase of 100-150%(character dependent)
1 character standing- X-Factor will last for 20 seconds, will give your damage an increase of 150-230%(character dependent) and will give you a speed increase of 100-175%(character dependent)
I hope this guide has given you a better understanding of how X-Factor works and gives you an idea of how to properly use it.
Let me know if you have any questions and I will be happy to answer them.