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How Stock Screening Software Improves Your Trading Profits

Updated on November 8, 2013

Why Traders Need A Stock Screener

Stock traders are faced with the overwhelming task of selecting from thousands of stocks, from markets around the world, when determining the best way to invest. While some investors and traders rely on fundamental analysis to assist them in narrowing down their selection, I firmly believe that a momentum-based, technical trading system is much more effective and accurate at predicting the future outcome of a stock's direction.

Being a technical trader means investing decisions are based on following market trends, as shown in various types of chart patterns. Therefore, traders who focus on technical analysis need a quick, easy, and effective way to narrow down their stock selection because it would be very inefficient to manually sift through the chart patterns of thousands of stocks on a nightly basis.

Fortunately, there is stock screening software that saves technical and momentum-based traders hours of time every night. Stock screeners (also known as stock scanners) is software that is programmed in such a way that simply pressing a button instantly filters the stock market using the desired technical criteria, which then filters out the results to display only the stocks that meet the predetermined criteria.

This article discusses the basic concept of stock screening software in a bit more detail, as well as the different types of stock market scanners available to traders, and finally some very important keys to consider when using scanning software.

Comparing Different Types of Stock Market Screeners

Customizable vs. Preset Scanning Criteria

There are two main types of stock screeners that momentum swing traders use on a daily basis: customizable and preset scans.

Customizable stock scanning software provides the benefit of being able to highly customize the technical criteria from which to filter your stocks, giving the swing trader full control. However, the downside of customizable stock screening programs is that they often have a relatively steep learning curve and require at least a basic knowledge of programming and/or coding.

For customizable stock scanning, I like to use TC2000 by Worden Brothers. This software makes it relatively easy to set your own criteria for scanning and then quickly flip through stock charts of all stocks that meet that custom criteria. It's around $30 per month, but well worth it.

Preset stock screeners, on the other hand, are much more user-friendly because they have already been developed with predetermined technical criteria that is designed to find stocks that are following a certain type of pattern. For example, this type of software may enable traders to instantly spot certain technical chart patterns, stocks with relative strength, stocks about to breakout, or stocks pulling back within their uptrends.

For most stock traders with beginning to intermediate experience, scanning for stocks with preset options is the way to go. From there, one can gradually work up to more sophisticated stock scanning technology. One of the best preset stock scanners is the MTG Stock Screener, located at: https://www.morpheustrading.com/services/stock-screener. It's 5 bucks for the first month (trial period), and then $11.95 per month thereafter.

Screenshot of the MTG Stock Screener

Source

Are You A Daytrader Or Swing Trader?

Intraday vs. end-of-day stock market screeners

Before determining the best type of stock screener to suit your needs, it is also important to know whether you require scanning software that is designed for daytrading or swing trading (click here for a summary comparison between the two trading styles).

An intraday trader ("daytrader") would obviously require trading software that provides updated stock exchange data updated on a real-time intraday basis.

A swing trader, who typically seeks to profit from the momentum of holding stocks for several days to several weeks, only requires "end of day" stock scanning software. In this case, stock exchange data is simply updated after the close of each daily trading session.

MTG Stock Screener - Simple and Effective

End-of-day stock screening software with easy, preset scans

In the first 5-minute video below, learn how the MTG Stock Screener enables short to intermediate-term swing traders to quickly and easily spot the best stocks and ETFs in USA, Canada, India, and United Kingdom (UK). With no programming skills required, this technical stock screener offers a simple and effective "turn key" approach to instantly finding the top stocks in various world markets within a matter of minutes.

In the second video that follows, you will learn how to quickly spot the strongest stocks that are poised to breakout from bases of consolidation.

Overview of the MTG Stock Screener

How To Find Top-Ranked Stock Breakouts

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      Dimitrj 2 years ago

      Hi Deron

      We have created a powerful, free (forever!), stock-picking tool, with 68000 stocks worldwide and 18 (for now) investment guru strategies (Buffett, Graham, Templeton, O’Shaugnessy and many more): http://www.meetinvest.com/

      It would be great if you would check the platform out and add the tool to the list, if you find it being useful.

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