Finding the right stock is tough work. Disciplined investors have a near-absurd volume of stocks they must dig through to unearth that one money-making gem; with the advent of the Internet and its associative proliferation of data, the art of finding the perfect stock can almost feel maddening. Fortunately, stock scanners can help savvy investors slash through the unwanted treacle to get to stocks that fit their trading milieu. Of course, as with any product, no two stock scanners are alike, and picking the right one requires a bit of research.
Why Stock Scanners Are Important
Stock scanners, also known as stock screeners, primarily help investors detect stocks that match certain investor-provided financial criteria. It’s an easy tool that combines a company database, a set of variables, and a screening engine to produce stock-tracking data based on more or less any metric or criterion desired.
There are free scanners that investors can use, although scanners that are available via paid subscription may provide extra perks like real-time data tracking or state-of-the-art technologies to go about their business. These scanners all possess the same goal of providing investors a means to maximize profits and minimize risk, but they do go about reaching this endgame differently.
Finviz may arguably be the gold standard of stock scanners. This visually-oriented site easily puts a lot of the data investors look for through technical analysis in an easy-to-read format, using drop boxes to enable investors to easily set the parameters of what they are seeking. Essential information like volatility, stocks showing unusual volume, and stocks trading near support and resistance lines are all available at the investor’s fingertips.
Finviz is my favorite scanner except for the fact that it doesn't include OTCBB
Finviz does offer a free version of their product featuring delayed data. However, investors that sign up for the company’s Elite service will get access to more features such as real-time charts.
Sometimes, simplification is the smart choice when it comes to the stock market. This seems to be the philosophy behind Morningstar’s stock screener, which is why it’s a well-respected tool. It doesn’t have much in the way of fundamental or technical analysis, but it makes up for this by having an easy-reading proprietary rating system that provides investors with enough data to drill down to specific stocks and sectors. What’s more, the free service gives investors access to certain criteria that would normally be reserved for Premium members on other sites.
It’s not necessarily a surprise that this titan of the Internet industry has jumped into the stock scanning business. It shouldn’t be much of a surprise to note that it’s entered the market with sufficient visual flair. But the tool is not just a pretty face; its interface is easy to pick up on, and it operates at a fast speed – an essential component of certain trading strategies like day trading. While the system is lacking in the fundamental and technical filter department, its intuitive nature makes it a reliable option – particularly for those that are just learning how to use stock scanning tools.
If you’re the type of investor that flourishes on fundamental analysis to hone in on stocks, then Zacks may be the stock scanner for you. This thorough scanner produces a wealth of handy fundamental info at the push of a button, including consensus earnings estimates and a whole lot of financial ratios. Other basic items like daily volume, price, and exchange are also available.
There is a free version of Zacks that lets investors screen stocks for free. However, the paid version of the tool provides investors with access to premium features such as a ranking tool that provides insight on expected stock performance over the next three to six months.
Trade-Ideas’ stock scanner is a terrific option for the investor that likes to play around with a wide range of scenarios. The service offers a wide swath of variables to help shape strategy, from basic stuff like price and volume to deep cuts like some daily transactions, dollar-volume, price range over a given number of days, and volatility.
If investors don’t feel like sifting through hundreds of technical metrics, investors can also use Trade-Ideas to just check out fundamental variables by setting up minimum and maximum criteria. This flexibility combines with its overall ease of use to craft a stock scanner that can be useful for any level of investor.
Some stock scanners will require investors to go through the same process of setting up your criteria for their searches every day. Chartmill doesn’t do this. Instead, it allows investors to save their personal default settings. If you plan on looking for the same kind of stock information for a few days, this will let you do so with greater efficiency.
Convenience is not the only thing Chartmill offers. Its technical, analytical offerings are pretty in-depth, as they provide criteria like moving averages and Bollinger bands to help investors yield vital information.
Just Don’t Pick One – Research!
Any tool that you use to help you navigate through the stock market is going to be geared toward the same thing. That is, to help you maximize profit as it minimizes risk. Stock scanners are no exception. But this doesn’t mean that one’s better than the other. What may be an exceptional product for one type of investor may only be a fair to middling choice for you and your investment style.
Therefore, while it’s important to have a stock scanning service at the ready, it’s even more important that you take the time to find the right type of scanning service.
Take the time to research the ins and outs of their products. Talk to other investors that utilize their tools. Take advantage of their free tools to give them a “test drive” before you commit to plunking down funds to purchase the full version. Doing these steps may spell the difference between using the right service and the wrong one. Ultimately, it may also spell the difference between finding the perfect stock and unwittingly continuing to let a stock float under your radar.