The document discusses various support and resistance trading strategies, including manually drawing support and resistance lines, automatic support and resistance, pivot points, Fibonacci retracements, new highs/lows, and using risk/reward ratios. It provides guidance on determining the strength of support and resistance, and how to use these concepts for buying and selling decisions. Composite scans are presented for identifying potential high-volume breakouts and breakdowns.

1. Support/Resistance
Trading Strategies
Himanshu Patil
twitter : himanshugpatil
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2. Support/Resistance Strategies
 Support/Resistance Introduction
 Support/Resistance (manually drawn)
 Support/Resistance (automatic)
 Pivot Levels
 Fibonacci Retracements
 New Highs/Lows
 Using Risk/Reward Ratio in trading
 Support/Resistance Zones
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3. Support and Resistance
Resistance
Support
Price
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4. Drawing Support/Resistance
(the manual way)
 Resistance
 Draw a line through as many highs as possible
without violating it (i.e. without a close above
resistance)
 Support
 Draw a line through as many lows as possible without
violating it (i.e. without a close below support)
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5. Drawing Resistance
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6. Drawing Resistance
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7. Drawing Support/Resistance
(the manual way)
 Resistance and Support change roles:
 Resistance when broken turns into Support
 Support when broken turns into Resistance
 Hence, we can predict future Support/Resistance
levels based on past levels
 Drawing support/resistance:
 Draw a line through as many highs and lows as
possible with minimum violations
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8. Drawing Support/Resistance
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9. Drawing Support/Resistance
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10. Determining the Strength of
Support/Resistance
 How many highs or lows does it touch?
– The more the touches, the stronger it is.
 Volume accompanied by break?
– The stronger the volume, stronger it is.
 How recent are the touches?
– The more recent the touches the stronger it is.
 How long is the support/resistance line?
– The longer it is, the stronger it is.
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11. Drawing Support/Resistance
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12. Drawing Support/Resistance
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13. Auto-Support/Resistance
(the automatic way)
 Investar uses Artificial Intelligence (AI) to
draw support/resistance lines just like an
expert TA would
 Rate the lines based on:
– No of touches
– Recency
– Length
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14. Auto-SR
 Top 20 %ile - Very Strong Support/Resistance
 Next 20 %ile - Strong Support/Resistance
 and so on…
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15. Auto-SR options
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16. Using Resistance & Support for
Buying
Resistance
Support
Break of Resistance Close to Support
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At start of new uptrend In a sideways trend

17. Using Resistance & Support for
Selling
Support
Resistance
Break of Support Close to Resistance
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At start of new downtrend In a sideways trend

18. Importance of various tools
 Support, Resistance & Trendlines
 Technical Indicators
 Japanese Candlesticks
MORE IMPORTANT
LESS IMPORTANT
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19. Support/Resistance Techniques
 Support/Resistance (Manually drawn)
 Auto-Support/Resistance
 Pivot Levels
 Fibonacci Retracements
 New Highs/Lows
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20. Pivot Points (Day-traders only)
 Calculated based on OHLC Data.
 Today’s intraday levels based on
Yesterday’s OHLC data
 Pivot Point (PP)
 3 Support Levels (S1, S2, S3)
 3 Resistance Levels (R1, R2, R3)
 Valid only for intraday
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21. Pivot Points
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22. Pivot Points vs Auto-SR
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23. Fibonacci Retracements
 Horizontal lines dividing vertical distance
between 2 endpoints of a trendline by Fibonacci
ratios of 23.6%, 38.2%, 50%, 61.8% & 100%
 How do you create them?
– Use Fibonacci Retracements tool to draw a trendline
between two extreme points
 How do you use them?
– Fibonacci Levels indicate possible levels at which
prices may retrace.
– Use only when you see them successfully working on
some scrips in the past.
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24. Fibonacci Retracements
H
H*38.2%
H*50%
H*61.8%
H*23.8%
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25. Fibonacci Retracements
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26. Fibonacci vs Auto-SR
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27. Pivot Points & Fibonacci
Retracements Guidelines
 Mathematically calculated
 Not based on actual supply/demand
 Only rational is that they work because other
traders use them
 Success rate will not be consistent and will vary
from scrip to scrip
 Test them well before using on any scrip
 When a software claims Auto-Support/Resistance,
ask them how it is calculated
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28. New Highs/Lows
 Previous High as a resistance
 Previous Low as a support
 Long-term trader:
 New 52-week Highs/Lows
 Short-term trader
 New 8-week Highs/Lows
 New 15-day/5-day Highs/Lows
 Intraday trader
 Above Previous Day’s High
 Below Previous Day’s Low
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29. New High vs Manually Drawn
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30. Risk/Reward Ratio
 Risk/Reward Ratio
– Maximum Profit/Stop-Loss
 Risk: maximum loss you can have.
 Reward: maximum profit you can have.
 3:1 Risk/Reward ratio means:
– Reward is 3 times the Risk.
 High Risk/Reward minimizes your risk and
maximizes your profit.
 Widely used by professional traders
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31. Risk/Reward Calculation
 Risk: maximum loss you can have.
– Usually the Stop-Loss
– Depends on type of trade because your
expectation of gain is different based on type
of trade
– Stop-Loss is set to keep Risk/Reward ratio > 3
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Trader Type Ideal Gain Typical Stop-Loss
Long-Term > 50% 10%
Short-Term 15-25% 5%
Intraday 2-3% 0.5%

32. Risk/Reward Calculation
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33. Risk/Reward Calculation
 Reward: maximum profit you can have.
– long trades (i.e. when you buy):
 Profit = (nearest resistance – close)
– short trades (i.e. when you short sell):
 Profit = (close – nearest support)
 Risk/Reward Ratio
– Maximum Profit/Stop-Loss
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34. Risk Reward Ratio
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35. Support/Resistance Zones
 Nearby Support/Resistance lines can be
clubbed together to create a
Support/Resistance zone.
 Using S/R zones instead of S/R lines can
improve accuracy
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36. Using Support/Resistance Zones
 Buying on breakouts/breakdowns:
– Buy only if stock goes above upper resistance
in a resistance zone
– Short Sell only if the stock breaks down below
lower support in a support zone
 Setting targets:
– Long (i.e. Buy): Use the lower resistance line
in the resistance zone as a target
– Short (i.e. Short Sell): Use the upper support
line in a support zone as a target
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37. Auto-SR
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38. Auto-SR with SR Zones
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39. Interesting Composite Scans for
trending market
 High Volume Breakout (at start of an uptrend):
– Very Strong Resistance Breakouts
– Volume Gainers
– High Risk/Reward Ratio (Long)
 High Volume Breakdown (start of a downtrend):
– Very Strong Support Breakdowns
– Volume Gainers
– High Risk/Reward Ratio (Short)
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40. High Volume Breakout - High RR
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41. How can I get this feature?
 Auto-Support/Resistance,
Risk/Reward ratio & Stop Loss were
released in FinBridge 2016 Mumbai
and were also highlighted there.
 Available as an addon in Investar 5.4
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42. Liked Auto-SR?
 Follow us on twitter:
@himanshugpatil
@investarindia
 Tweet with hashtag #AutoSR
 Visit us on Facebook
 Visit our youtube channel:
www.youtube.com/investarindia
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43. THANK YOU
Thank You for Attending!
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