There is a stock scanner that will make the process of screening stocks simpler for those involved in trading and investing in a variety of markets. It searches the markets or groups of stocks using filters implemented by the individual based on specific criteria and certain metrics that suit that person’s streamlined search modifications.
Basically, the digital world meets the stock market for traders and investors to make the task of searching for trading options more fine-tuned, efficient, and convenient for users. In doing this, the tool has become the new ‘must-have’ in the trading and investing community.
Advantages Of Using Stock Scanners
Instead of traders and investors having to weed through mounds of statistics and data to determine the best options for the value of a single trade, the whole process can be simplified using a new technological tool that can produce multiple candidates to choose from in a single output.
A stock screening allows for the convenience of inputting your desired specifics to narrow the scope from countless down to a reasonable, workable, as well as potential amount meeting your particulars. This digital concept could prove quite effective when put to use properly. This will show you ways to build an ideal screening.
Stock Scanners Functions/Search Periods/Types
Stock tools offer two primary search periods and functions, fundamental and technical dependent on intraday data, either real-time or end-of-day. Based on the kind/style of trades you choose to make will decide your analysis choice.
The suggestion is that you should opt for fundamental in the case of long-term investing or ‘swing-trading,’ The opposite is true for short-term or intraday where you would opt for the technical.
- Fundamental Scanners: This is the most abundant of the ‘free’ version online being tailor-fit for longer-term investors or traders who are fundamental-based. They are efficient with finding stocks deemed ‘undervalued’ or ‘overvalued’ as well as comparisons against those in their industry, peers, sector, or benchmark indexes.
- Technical Scanners: In screening within this category, they seek out certain price patterns or triggers, price alerts, or indicator triggers. These mandate a more customized program level or potentially added effort during the analysis process once possible candidates are recognized to achieve optimum use.
- EOD/Post-Market or End-Of-Day: The results with these are in the form of fundamental or output patterns. These require patience as the idea is to research to go into the following day as the outcome is formulated from the day’s closing prices with no chance for trading.
- Intraday or Real-time: During market hours, these tools use time-sensitive outcomes to use with stocks ready to trade immediately. Intraday patterns have the potential for rapid feedback for which day traders can benefit.
Trading Platform-Type Scanners And Desktop Variety
There is typically some sort of scanning tool associated with most of the trading platforms, which can be simplistic, like the high-low intraday or complex as with the pattern-based harmonic. The claim is that the more intricate the filters are in this process, the more challenging it is to obtain a timely, accurate outcome.
These have the ability to search for specific stocks groups or the whole market. Crunching numbers will slow a system considerably as it utilizes significant resources meaning consideration needs to be taken whether your computer or the data provider resources will perform the screening. With this type of scanning, you may require programming training for operation.
In using the software-based downloadable desktop version, you will see much faster outcomes. However, these will drain your resources substantially, not to mention reducing the speed of the remaining functionality. In saying that, the recommendation is that those using this type should stick with scans of stock groups such as ‘watch lists’ as opposed to attempting the entire market.
The programs are customizable, allowing for alerts to such things as pattern triggers with a much faster reaction time than that of the cloud-based variety. The desktop also requires knowledge in programming as well as the process of selection of criteria in order for scan customization.
Once you understand the technology and can implement it correctly, a Trade Ideas scanner has the potential for helping channel focus to the best-qualified candidates. The critical thing to understand is that the outcomes are merely meant as a filter. There is still a need to thoroughly analyze for tradability and verify setup prior to deciding whether to trade.
Not all of these tools will be dependable or correct, particularly those that are pattern-based. If you don’t learn to use the device correctly, there is a possibility to be spread thin among candidates allowing many opportunities for fast losses. It is why becoming versed in criteria and testing the accuracy of the scanner for reliability is crucial before you trade in real-time.