Before we understand what is stock screener, it is important to understand that selecting stocks for investing or trading is the most important and crucial task when you plan to invest in the stock market. Investing in the right stocks is very important to be a successful investor. To filter out stocks for investing, investors often use a set of tools know as stock screeners.
1. What is Stock Screener?
Stock screeners allow investors to sort quickly through the ocean of stocks available according to their preferred criteria. These screeners are available with brokers and investment advisors. Before understanding how stock screener works it is very important to understand that sorting or filtering stocks is a very tedious task and requires tremendous knowledge and experience. Stock screeners depend on the inputs of the user and help them in narrowing down the available opportunities.
These screeners are used by investors for both technical and fundamental analysis by professionals and newbies both. These screeners shoot an alert whenever a certain pre-defined parameter is achieved which draws the attention of the trader or investor for executing their trade. Let us now discuss how to use stock screener for day trading or another trade forms.
2.How to use Stock Screener?
The main benefit of using stock screeners is that they allow investors to sort stocks using their own criteria. They begin by first defining their criteria, which depends from trader to trader and investor to investor.
A technical trader might be interested in chart patterns, moving average levels and cross overs and RSI (Relative Strength Index) levels to indicate momentum. On the other hand, a fundamental investor will look for dividend yield, market capitalization, earning per share (EPS) or multi-year return on investment.
As the user keeps on adding more and more criterions, the list of sorted securities becomes shorter and shorter. The prime advantage of using screeners is that they can be used by almost every trader and investor because they allow the user to choose his own criteria or strategy for sorting out stocks.
3. Are Stock Screeners good?
Stock screeners offer a plethora of filtering options to investors for sorting out stocks. A user can choose various categories from both technical and fundamental windows and screen stocks. Stock screeners are recommended for investors who are familiar with the basics of stock markets. For newbies, using stock screeners can be a serious task.
Before you invest in the stock market, or use any stock screener, you must understand the basics of stock market and have a basic about the various different strategies and evaluation criterions available. An investment advisor can help you in providing you trade recommendations based on research using both technical and fundamental analysis bypassing the use of stock screeners. Once you gain considerable experience in the market, you can start trading on your own using stock screeners.
