How to pick the right stock scanner

When investing in the stock market, finding the right company to invest in can sometimes be challenging. That is why tools like stock scanners have been created to help online investors get an in-depth analysis of numerous publicly traded stocks for them to pick the right ones for them.

What is a stock scanner?

It’s easy for investors and traders to bet on multinational firms and companies they always hear about like Amazon or Facebook. But how are investors supposed to find out about stocks with great growth potential otherwise? Introducing stock scanners!

These are unique and powerful tools that easily screen for winning stocks depending on the criterion/filters youare basing your analysis on. Stock screeners are a great help when it comes to analyzing thousands of stocks to help you quickly find and focus on the ones that meet certain criteria and suit you.

Why should you need a stock screener?

If you’re into stock trading and investing, you know that finding the right company to invest in is necessary to be able to make profits over the long run. You also know that it takes time to be able to spot the right companies, amongst all the choices you have available. This is where a stock screener helps you - it allows you to narrow your choices in a more efficient manner, so then you can focus on a few companies that already meet your criteria.  

How to pick the right stock scanner

To find the right stock scanner for you among all the best stock scanners available in the market, you first need to think about your investment strategy and goals to determine criteria on which to base your analysis.

As stock screeners act like a database with thousands of companies you can filter depending on a set of variables to generate a list of potential winners, you need to know which metrics to use to narrow the list of potential stocks to invest in - and for that, you need to know which kind of trader you are and what your investment strategy is.

There are different stock screener options available in the markets today, so you can choose the one that will best suit your trading and investment strategy, and likely provide the best results. You have stock screeners focusing on technical analysis factors, like breakouts, overbought/oversold situations, and trend reversals for instance, or stock screeners focusing on fundamental analysis with financial metrics, value or growth investing, bargain investing, or momentum investing set-ups, etc. You also have stock screeners adapted for day traders, swing traders, penny stock traders, etc.     

Bottom line

If you use stock screeners properly, you will discover that they can be extremely powerful tools, but always remember to define your setups first depending on your investment approach. While stock screeners are great tools to help you narrow the list of companies that might be interesting to invest in, you should also do your own research. Think more of a stock screener as a starting point to make more informed trading decisions.

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