Stocks present a profitable opportunity for individual and for corporate investors. However, different people prefer investing in stocks that meet certain personalized requirements.
Luckily, you can use a stock screener to find out if certain stocks meet your requirements or not. This article explains what a stock screener is and what it is used for. It also presents different kinds that are available and it tells you how to use them effectively. Continue reading…
What are stock screeners meant for?
Stock screeners are filters that help you to reduce the giant amounts of stocks to a smaller number that meets a certain technical analysis or fundamental criteria that you have set. There are different kinds of stock screeners, each of them offering different tools that are used for filtering trades. Some of these tools focus exclusively on pattern recognition while others are only used for a fundamental analysis.
It is important to understand that choosing a good stock from the immense volumes that are available in the market is never easy. There is a an enormous amount of data that contributes to making useful information useless. Luckily, by using a stock screener, you can focus on stocks that meet your pre-defined criteria or standards and that fit with your trading strategy.
Using different components of a stock screener
A stock screener consists of three components: The company databases, a screening engine and a set of variables for screeners like:
- Small cap or large cap stocks
- Price to Earnings ratio range
- Chart Patterns
- All time high and all time lows
- Earning ratios
- Candlestick patterns
- Pre-market and Post-market movements
A good stock screener will provide you with the tools that will allow you to search for stocks that meet your specific criteria. If you can focus on measurable factors which affect the price of stocks, you will be carrying out a quantitative analysis.
Among other things, these factors include the price to earnings ratio, profit margins, volatility and revenue and market capitalization. Those are important figures when you learn how to trade.
Seven awesome screeners that you will find in the market today
At the moment, several stock screeners are available in the market. Among these, there are screeners with features that can be customized while you can't customize some of the others. In addition, there are free options while you have to pay for others. Here we introduce three of the best examples that are just available.
1. Yahoo Finance
This is an incredible choice for stock traders who are searching for a simple, free fundamental stocks screener. Beside helping you to screen for stocks, it also screens funds and bonds using the same interface. Yahoo Finance offers three screens: Strong forecast growth, largest market capitalization and greatest sales-revenue. Useful explanations are available for every screen for you can understand the basic principles.
2. MSN Money
This advanced mathematical system offers a one to ten rating system that helps you to filter out companies according to the expected risks and returns of their stocks. Beside the preset parameters, MSN money also makes it possible to customize your filters and to choose stocks that meet specific requirements.
With Finviz, you will find a screener that includes a drop down menu that filters things like e.g. wedges, insider buying and top gainers. Finviz is a visually oriented website that shows the biggest gainers and losers on its homepage. It also shows stocks that are trading at volumes that are unusually high.
With its help you get to know which stocks are trading close to resistance or support. This screener can divide the stocks in three sections: Technical, fundamental and descriptive. The user sets the requirements according to the volume, the company's strengths, dividend yields and a wide range of other criteria.
The users also have the opportunity to select from preset signals, like e.g. the level of volatility of stocks, insider buying and many more. In spite of the excellent features that this incredible stock screening offers, you will still find it for free!
However, the Zacks stock screener has great free functions that are worth it to give them a try. Most of the free functions are standard functions. Zacks premium offers a lot more functions to scan the market, but the premium screener costs $29 per month.
The Uncle Stock screener is one of the less known stock screeners in the market. The Uncle Stock screener is more focused on scanning fundamental data than on technical stock screenings. With their calculation methods, Uncle Stock screens the market based on historical and expected financial metrics.
The traders are able to create their own screens and to search stocks based on the industry, location and valuation criteria. As a bonus, investors may back-test their individual stock screeners to develop their individual strategy.
6. Google Finance
The Google finance stock screener may be compared with Yahoo´s stock screener. It is really fast and web based and the traders have the opportunity to configure their settings individually. The traders may also scan for specific filters, like e.g. Market cap, P/E ratio, Div yield (%) 52w price change (%) and more.
However, none of the previously mentioned stock screeners has nearly as many functions as Trade Ideas Pro. Continue reading to learn more about the best stock screener of all.
7. Trade Ideas Pro
The Trade Ideas Pro scanner is a downloadable windows friendly scanner that works in real time. This stock scanner has interactive features that make it possible for traders to scan the market, to identify the best trading setups and to develop the best trading strategies.
At the moment, this is one of the most powerful real time trading analysis tools that are available in the market. It works perfectly for those who want to trade futures, ETF's and stocks. Read our Trade Ideas Review for more information about Trade Ideas Pro.
Trade Ideas is not only the best web based real-time stock screener but it also has the best real-time stock screener app.
What you should know when you are using stock screeners
Screeners offer a lot of flexibility, but it is highly recommended for you to know the criteria you need to search for what you really want. There is a countless number of available variables that make the possibilities for combinations endless. You need to know exactly what you want to measure; otherwise, even a feature-rich stock screener may not help you at all.
Things to keep in mind when you are using stock screeners
Stock screeners are quite useful in helping you to make decisions about your investments. However, like other trade analysis tools that are available at the moment, they all show a number of limitations. Here are the crucial things that you should keep in mind when you are using them:
- Most of the available stock screeners include quantitative factors. However, there are many other qualitative factors that you should better keep in mind, among others e.g. labor disputes, lawsuits and customer satisfaction levels.
- Stock screeners make use of database which is updated according to different schedules. This makes it important for you to check the actuality of the data before using it. You will not benefit from relying on stale data when you are making decisions.
- There are certain blind spots that are industry specific that you should watch carefully. For example, if you are searching for high price to earning information, you should not expect technology companies to show up. You will mostly find fast moving consumer goods companies showing up there.
Best Stock Screener 2017 - Conclusion
Stock screeners are very important as they are helping you to screen for stocks. There are different types of them in the market. While some are available for free, there are other versions you have to pay for. However, you should know that these tools are no magic pills that help you to choose the perfect stocks.
You have to know exactly which kind of information you need to obtain it with the help of a stock screener. However, the screeners will help you to start with your research and they may help you to save time by narrowing down your stocks to a small, manageable number. While you proceed with your research you should use your intuition to choose the best stocks that meet your specific requirements.
Stock traders may prefer Trade Ideas Pro with the great Artificial Intelligence feature being part of the TI-Pro stock screening software for maximum convenience. To learn more about Trade Ideas Pro, continue reading our detailed Trade Ideas Review.
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