As a trader, as we have mentioned, there are a number of different tools that can help you on your path to success. From simpler, free tools like a watchlist, to more advanced charting software that assists you with technical analysis. One of the more advanced tools that a number of successful traders choose to work with has got to be the stock screener. In reality, a stock screener or sometimes a stock scanner, is actually a series of tools in one. This combination of tools allows you to quickly sort through a number of different stocks and ETFs, based on a number of different search criteria and changes in analytical points. While a number of brokerages such as TD Ameritrade, as well as their Think or Swim platform, offer onboard stock screeners for free, other companies offer slightly more advanced versions, with more features for a subscription-based, monthly fee. Considering that certain traders may trust in a specific strategy that requires them to look for certain figures and changes in certain numbers, these stock screeners allow them to spot such opportunities and entry points far faster and easier than they would if they were just sorting through the stocks one by one, without the help of an actual software application.
The Basics of a Screener Application
The thing to remember about the stock world, and what’s often very enticing to individuals, especially day traders, is that there are thousands of individuals stocks out there, and even when the market as a whole is down, many of these stocks are up individually. And if you know what the metrics are to look for, your stock screener can help you find those individual stocks that are going up on that day. Trying to sift through thousands of individual securities on your own can be nearly impossible without the help of this type of valuable software.
Users start by selecting certain parameters that they believe will help guide them towards certain “winning” stocks. For instance, some fundamental investors might be looking into certain figures such as the market capitalization, in conjunction with other things like an analyst’s recommendations, a company’s cash flow, multi-year ROI, dividend yield, and other similar statistics. A technical trader would be more interested in moving average levels/crossovers, RSI levels, ADX readings, and chart patterns, average volume and other figures. The more specific your criteria becomes, the smaller the list of securities becomes. This means that the stock screener shows you only the stocks that meet your criteria, and a savvy investor will then simply pick the best from the pool of what the screener presents them with.
Learning to Use the Screener
When you first begin to use a stock screener, it can be quite daunting looking at a number of different statistics and criteria you have no idea about. However, as you begin to learn about certain aspects of the market, you will begin to identify certain patterns to your successful trades and begin to look closer into other securities that might exhibit similar characteristics. Before you delve into screeners however, its important to understand whether you are more interested in technical or you are interested in fundamentals – once you do, you can look closer into those areas and see what the screener can help do for you.
More short-term traders are generally more interested in momentum related figures or technical tools, such as charts, RSI, daily volumes and more. individuals can even set alerts for their stocks of interests, and identify when they might have reached a certain price point, or a certain volume level, and these are the indicators by which they will judge whether or not to execute trades or not. For more long-term investors however, who are more interested in the fundamentals of a company’s stock, such as market capitalization, or average volume, and more – the screener can also search for securities based on these figures as well. Its important that you just know what to look for and, depending on the screener you might be using, how to search for these specific indicators. A commonly used free screener that many people choose to use is the Yahoo Finance Screener. It not only offers presets for certain more common searches, but allows you to customize your own screener, and even save it for later. For more information on trading and investing, be sure to checkout the Stockia Education section today.