Back when I was learning how to trade penny stocks, I didn’t have stock screeners.
I was in high school, learning how to build my account up from $12,415. I skipped classes to hang out in the high school library. The computers there had the fastest internet connection around.
One librarian knew what I was up to and recognized my passion. One day, he even helped me get on a computer when a teacher was running a class in the computer lab! He said something like, “This kid needs to get on a computer to complete an urgent project.”
The teacher kicked one of her students off so I could research the market…
Ah … the good ol’ days, right?
It was hard work. Multiple computers with browsers open to search finance message boards and intraday stock quotes…
… looking up SEC filings, earnings reports, and press releases on slow computers with painfully slow internet by today’s standards.
I don’t begrudge the time I spent learning. Since then I’ve made over $5.9 million in trading profits.* I learned tons and I loved every minute of it — which is something I often hear from my Trading Challenge students. But I don’t want to go back to that way of doing research. I’ll take a modern stock screener any day of the week.
(*These results are not typical. Individual results will vary. Most traders lose money. My top students have the benefit of many years of hard work and dedication. Trading is inherently risky. Always do your due diligence and never risk more than you can afford to lose.)
Table of Contents
- 1 What Is a Stock Screener?
- 2 8 Top Stock Screeners
- 3 How to Take Advantage of a Stock Screener
- 4 Key Features From a Stock Screener Software
- 5 Frequently Asked Questions About Stock Screeners
- 6 The Bottom Line About the Best Stock Screener
What Is a Stock Screener?
A stock screener is a tool that lets traders filter or ‘screen’ stocks based on specific criteria. If you don’t have a stock screener, how do you know which stocks are ‘hot?’
With a stock screener, you can narrow down your focus to only the best stocks to fit your account size and trading strategy. You can search stocks based on price, percent gain, volume, market cap, sector … the criteria are almost endless.
Without a stock screener, you could spend endless hours researching … like I used to. But you don’t have to do that anymore.
Stock screeners make a day trader’s life much simpler than the old days. You still gotta do your homework, but you can set screens to create your watchlist.
When Should You Use a Stock Screener?
Every friggin’ day! At the very least, every day at the market’s open. And you should study on weekends when the market’s closed.
Use a stock screener every day.
Especially when you’re building your daily watchlists. How else will you sift through the thousands of stocks out there? Need guidance? Sign up for my FREE weekly watchlist and I’ll send you hot stocks I’m watching every week.
Don’t just sign up for my watchlist for hot stock picks, though. That’s lazy — you can’t cheat success. Use the watchlist I provide to learn the process, then make your own. Later in this post, I’ll explain more about how to screen stocks for your watchlist.
Benefits of Trading With a Stock Screener Software
Here’s where modern technology gets awesome. If you use a top-quality trading platform — like StocksToTrade — it will have built-in stock screener software.
So what’s the deal? Why should you use a stock screener? First and foremost, it can save you time. Especially if you trade penny stocks. Sometimes finding information on these stocks is difficult. A stock screener can help.
8 Top Stock Screeners
I think the best stock screener for day trading is StocksToTrade. I use it every day. And with brokerage integration, you can do everything with Chrome and StocksToTrade.
(Full disclosure: I helped develop StocksToTrade and I’m a major investor. That said, it’s my dream stock-scanning tool. It’s designed to help save time in finding the best stocks that fit my patterns and strategy.)
StocksToTrade has built-in scans — the ones I’ve been using for the past two decades. I even helped design this software! I was tired of having to log in to several sites and tools to get the information I needed.
Why go through all that trouble when you can click a few buttons and run a scan fast? And why jump around from your stock screener to your brokerage account if you can place your order from the same platform?
You can also scan for earnings winners, big percent gainers, big dollar gainers, news, Twitter…
Did you know Twitter is an awesome place to find out what other traders are watching?
Traders like me tweet about trades and stocks a lot. You can combine Twitter news with other criteria such as percent change, volume, and float to match your trading strategy.
Even better is StocksToTrades’ new Breaking News Chat Two former Wall Street pros sift through news all day and only alert the news that can move stocks. This tool is a game-changer. It makes it even easier to find all the news in one place.
So stop asking, “what scans should I be using?”
Seriously, I think there’s no trading platform with a smarter penny stock screener than StocksToTrade.
2. Finviz Stock Screener
The finviz stock screener is decent. But the data is delayed unless you pay for a premium service.
But even with the free service, you can use the stock screener to sift through stocks based on fundamentals or technicals. Or you can use descriptive criteria like an exchange, market cap, and float.
3. Yahoo Stock Screener
The Yahoo stock screener is also a decent free tool. If you want to see how it works, head over to the Yahoo Finance website. You’ll find the Yahoo stock screener in the headings on the homepage.
You can create your own custom screener or use some of their built-ins … like ‘Day Gainers.’ If you click that, you should see a list of big percent gainers from the last trading day (or today if the session is open). From here, you can also filter your results by clicking ‘Edit.’
Now, look at the top stock on the list. There are columns for price, price change, percent change, volume (keep this in mind), three-month average volume, and so on.
4. Fidelity Stock Screener
The Fidelity stock screener is only available to its clients. It includes built-in scans you can use or you can create a custom scan.
You can search for stocks by sector, market cap, and other criteria. You can get guest access, but you’ll have to create an account with login information.
5. CNBC Stock Screener
On the CNBC stock screener, you can also use built-in scans or you can create your own.
You don’t have to create an account to use the stock screener. Want a stock screener for day trading? The finviz stock screener and the Yahoo stock screener have more options to help you narrow your search to find the stocks that fit your strategy.
Of course, I don’t think any come close to matching StocksToTrade.
6. Zachs Stock Screener
The Zachs stock screener is also free to use. It has criteria to narrow down your search. But it doesn’t have as many choices as the finviz and Yahoo stock screeners.
The Fidelity, CNBC, and Zachs stock screeners are more geared toward investors looking for companies with solid fundamentals.
7. Google Finance Stock Screener
Google Finance is a website that provides basic market information. It used to offer a stock screener as part of its website, but it was discontinued it a few years ago.
8. Marketwatch Stock Screener
Marketwatch offers a stock screener on its website. You can search for stocks based on price, volume, fundamentals, technicals, exchange, and industry.
How to Take Advantage of a Stock Screener
Once you have access to a screener, you need to know how to screen stocks. You could lose hours — or days — of your life trying to figure out what criteria to look for with the screener.
There’s so much to search for … but only a few things really matter in any given market. Let’s focus on those here. (Don’t think this means you can stop studying!)
By the way, even if you aren’t set up with a trading platform yet, there are some free stock screeners out there, like the ones I went over above.
Analyzing Price Performance With a Stock Screener
One basic thing I look for in stocks is price performance. I don’t want to trade something that’s not on the move. If I buy shares in a stock and the price action doesn’t match my thesis, I get out. I have this saying: When in doubt, get out.
Here are two things I look for in price performance: big percent gains and big dollar gains.
Big percent gains are pretty easy to sort with almost all stock screeners.
So you have no excuse for not using a stock screener to search for stocks. You can even do it on your phone!
Penny stocks tend to have huge percent gains in a very short time spans. That’s why I like to trade them. Why trade boring stocks where a $1 move is only 2% when you can trade a stock where a $1 price difference can mean a 20%, 30%, or even a 100% gain?
In this niche, big percent gains happen when low-priced stocks skyrocket fast. Big dollar gains, on the other hand, happen more often with higher-priced stocks. (For our purposes, I’m still talking about stocks under $10 per share.)
Maybe a $3 stock has good earnings news, is in a hot sector, and announces a big deal with a big company all at the same time. That stock could shoot up to $10 or $15. That’s a big percent and dollar gain at the same time.
Using a Stock Screener to Analyze Volume and Volatility
If you’re serious about trading penny stocks, you’ll need to pay extra attention to volume and volatility. Those two indicators walk hand in hand when it comes to price action. What do I mean by that? High volume stocks are more volatile — especially in penny stocks.
That’s why I use a penny stock screener that scans for volume and volatility.
Caveat: Even though volume and volatility are standard scans, not all stock screeners are good for penny stocks! Some stock screeners include OTCBB (over-the-counter bulletin board) or pink sheet stocks but don’t have all the information you need to trade.
Whatever you use, make sure it’s easy to get volume and volatility numbers.
You need a stock screener to scan for many criteria, including volume, volatility, price action, news, and Twitter chatter (like the one available on StocksToTrade).
Technical and Fundamental Indicators
You might hear the terms technical and fundamental a lot when you do stock research. Which should you pay attention to?
First, let me say you need to keep studying. Study hard, build your knowledge base, and keep at it. Never stop learning. I’m still studying after two decades of trading and a decade of teaching.
Now I can give you a more complete answer to this question…
As a penny stock trader, I’m not as interested in company fundamentals as long-term investors. I’m more interested in technical analysis — especially to determine entry and exit points and to see patterns.
Still, it’s good to know some company fundamentals.
I want to know the basics. What does the company sell? Are there rumors of upcoming product releases? Have they signed a deal with a big billionaire investor?
Remember, most of these companies will fail — you want to play a stock when it moves. But it’s a good idea to know what they do so you understand whether the news is good, bad, or indifferent.
Most of my focus lies with technical indicators. I use a technical stock screener to find stocks that meet the criteria I’m looking for. If you’re a newbie, you might think you can buy a stock as soon as you see something interesting. Not the case at all.
I use the stock screener to find stocks to watch. Before a trade, I get enough additional information to form a thesis about the stock. I use my Sykes Sliding Scale for every trade. You can learn how to use it in my “Trader Checklist Part Deux” DVD.
And I always cut losses quickly!
Locate Low Floats Stocks
What are low float stocks? They’re stocks with a low number of unrestricted shares available to trade. Strong catalysts in low float stocks can create big price swings as buyers and sellers compete for control of the market.
This comes down to the law of supply and demand. For example, say some crappy software company announces a big deal with Apple. That news catalyst creates demand, which makes the stock price go up because there aren’t many shares available.
So you need to have a low float stock screener as part of your bag of tricks. Ideally, you’ll have a screener that does all of this in one go. Like StocksToTrade.
Key Features From a Stock Screener Software
Over the years I’ve tried almost every stock screener and trading platform out there. Here’s a list of key features you should look for in stock screener software.
Winning Strategy Scan
Most of my wins come from a few strategies. There are some stock screeners out there that have pre-built screens based on winning strategies. That’s the case with StocksToTrade.
I want you to become a self-sufficient trader. You should want that as well. One of the best things you can do is keep a trading journal. If you do that, you’ll notice what’s working for you and what’s not. Pay attention to your winning strategies.
Once you have a winning strategy, set up a custom screen — a winning strategy scan — for your strategy. Make sense? If you could get your hands on a day trading stock screener that has all the screens built-in you’d be golden, right?
Percentage Gainers Screener
This screener will tell you what’s on the move so you can add them to your watchlist. Most stock screeners have this built in. Remember, big percent gainers match only one criterion.
New Daily High List
All the best stock analysis websites show an intraday trading range. That’s the price range from the day’s low to the day’s high.
One thing I look for when trying to find stocks with breakout potential is a new daily high. If the catalyst is powerful and there’s enough volume, the stock can keep running up once it’s broken through.
Dynamic Charts With News Indicators
Your stock screener should have dynamic charts with the ability to change the time frame. You also want the ability to add technical indicators and to relate news to the price action you see.
Watchlist Filtered News
This is huge for a penny stock trader. You want a criteria-based news streamer filtered to stocks on your watchlist. Then you can get alerts for specific news events that trigger price action.
Just 10 years ago, you had to subscribe to several different sites — often paid sites — for this level of research. That’s why I helped develop StocksToTrade, so you can get it all in one place.
Frequently Asked Questions About Stock Screeners
I get a lot of questions about stock screeners. Let’s tackle some big ones.
Can I Use a Stock Screener to Trade Penny Stocks?
No, you don’t execute trades through a stock screener. You’ll still need a broker account to trade penny stocks. Or you can use a platform like StocksToTrade that includes broker integration to trade from the platform.
Is It a Good Idea to Use a Stock Screener to Day Trade?
YES! A stock screener is a must-have tool for day trading penny stocks … or any stocks. You need to know which stocks are moving. Don’t trade stocks with no volume or interest. Get yourself a stock screener, even if it’s a free one, to find trades that fit your strategy.
What Is Technical Stock Screening?
Technical stock screening is searching for stocks based on technical analysis or indicators. A technical indicator is a chart pattern. That could include stocks making new 52-week highs or crossing a moving average. Big percent gains and gaps up are also key technical indicators.
The Bottom Line About the Best Stock Screener
If you want to trade stocks, a stock screener is one of the most important tools in your arsenal. It will help you sort through thousands of stocks to find only those that match your specific criteria and trading strategy.
A good stock screener can save you hours of research. Hopefully, now you have a better idea of how to use one — and a clear understanding of why they’re not all created equal.
When you’re ready, get your hands on StocksToTrade. (You can try it with a 14-day trial for just $7.) I think it’s the best stock screener available. In the meantime, keep studying.
How do you use a stock screener to find great trades? Let me know what you’ll do today to start your trading journey. I love hearing from you!