How To Use a Stock Screener

How To Use a Stock Screener

Posted on 30. Dec, 2010 by in Stocks

For those unfamiliar with the term, a stock screener is a tool typically used by stock market traders or investors to query a database of stock market quotes and data and to pull up a list of stocks meeting their desired technical and/or fundamental characteristics.

It’s also commonly known as a stock scanner.  There’s a variety of products out there; some are free, and others will charge admission.  Usually they’re web-based, but some of the specialized ones involve software that works on your local computer.  Some stock screeners will cover a field of thousands of stocks, ETFs, and market indexes, and others will narrow it to a selected group.  Some of them use a database that’s updated daily, or hourly, or some of the high-end stock screeners will even use real-time tick data.

There are tons of different features available to search for.  Some stock screeners will feature fundamental data such as PE ratio, industry group, earnings growth rate, dividend yield, market cap, and so on.  Others are based on technical data, such as moving average crossovers, Stochastics, MACD, and the like.

We’ve found that most of this is just a lot of fluff.  It figures, since there are just a few things we’ve ever seen that really have any predictive value in the stock market except by accident.  Some of the screeners provide CANSLIM features, which we actually have found to be useful (except for the EPS rankings, oddly enough).  And some stock screeners are devoted to specialized technical indicators and trading signals, some of which can be pretty effective.

The Gigascanner is one of the more effective stock screeners around.  Naturally, since we designed it ourselves! You can set up combinations of pre-set conditions, filters, and sort parameters using dropdown boxes, to bring the most powerful situations right to the top of the list.  It’s intentionally limited to the things we’ve found over the years to actually work (as opposed to the alternative), including a couple of very special trading signals of our own development.  These signals should not be overlooked – they commonly catch tops and bottoms on the exact day.  This is not an exaggeration, for example we had a Climax Low buy signal in the Dow on 3-10-2009, the day after the bear market finally hit bottom.

The user interface is powerful and yet easy to use.  You can scan stocks at the mere  touch of a button, and flip through a sorted list of professional, annotated stock charts scaled to fit your browser window.   The charts can have daily or weekly bars, or candlesticks, with a variable zoom factor and offset date, log or linear scaling, and indicators and signals applied in the color scheme of your choice.  You can save the good-looking charts in a watchlist for future reference.   Or, you can look at the entire list in table form.  Not to mention, there’s full state memory for 10 different workspaces, each of which which can be set up with your favorite stock screens, indicators, signals, colors, etc., even the background color. Try it, you’ll like it!

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