Get the Most Out of Your Stock Screener with These Tips

Choosing a stock to buy is not easy. You cannot just buy haphazardly or you will suffer a huge loss. Having so many choices makes things difficult and a lot of considerations, it’s almost impossible for a beginner to buy the right one. Luckily stock screeners exist and they can help you and other newbies to buy the right stocks. There’s no right choice (or very few?) but with a reliable stock screener or stock filter, you can minimize the mistakes you might make.

What is a stock filter?

It is a kind of software that do stock screening activities based on the criteria you have previously defined. Today there are thousands of stocks traded daily in the United States and examining them one by one is simply impossible. By using stock filters, you can reduce your headaches significantly! You can save your time and most importantly, get rid of the low prospect stocks!

Before using one or more stock filters, here are a few points to keep in mind:

– You will involve selection based on certain financial criteria.

– You will answer several questions as the basis for your screening.

– Some popular filters offer more filters than others.

– Make sure to do your own analysis and don’t just rely on software. The analysis combined with the software will bring the best results.

How does this great tool work?

We return to the habit of most day traders in choosing which stocks are considered profitable. They also basically use some sort of filter to weed out the bad stocks and collect the good ones. In general, a stock screener has the following three basic elements:

– a database

– a set of variables

– technology to find which companies meet the criteria based on the above set of variables.

As a user, you only have to ask a few simple questions like:

– Are large-cap stocks your choice?

– Are you looking for stock prices at record highs?

– Are you interested in falling stocks?

– Are you looking for stocks in a specific business sector?

– and so forth.

The more variety of questions you fill in, the more selective the search will be.

How to choose a good stock filter?

You can identify a good stock filter by its ability to filter based on the criteria you specify. A good filter can also focus on the measurable factors that affect stock prices. So it’s not just working based on inconsequential criteria, but based on items that are proven to affect the fluctuations in stock prices. Among them are volatility, market capitalization, profit margins, performance ratios, and of course revenue.

There are many free stock screeners available to you at but as the saying goes “nothing in this world is completely free”, if you want the best search results then you should use paid filters because they definitely have advantages that the free ones don’t have.

About the author

Editorial Staff

Add Comment

Click here to post a comment