Reviewed by Jan 29, 2021| Updated on
Stock screeners are a tool used by traders and investors to separate stocks depending on the user-defined metrics. The stock screeners are available at a certain subscription price on popular trading platforms and websites. The stock screeners let its users choose trading instruments that are suitable for any given profile or criteria. For instance, traders and investors can filter stocks based on the market capitalisation, price, P/E ratio, 52-week price change percentage, dividend ratio, average five-year return on investment, and average volume among others.
A few trading software and platforms allow traders and users to filter based on the technical indicators. For instance, an individual may screen filter for stocks being traded over and above their 200-day moving average or those with Relative Strength Index (RSI) lying in a given range.
A lot of investors make use of the stock screeners to identify stocks that are about to perform very well over time. An active trader can make use of the tools of the stock screeners to identify the possibility of set-ups for short-term positions. Individuals may use a lot of filters. More the number of filters, lesser will be the number of stocks being displayed. The stock screeners let the investors and users analyse several stocks over a short period of time. This will help you in identifying and eliminating stocks that are not meeting an investor or user’s requirements and give emphasis on those instruments that are well inside the metrics that are already defined.
The stock screeners may help users in their strategies of trading. All trade exits and entries must be well within the rule. The specifications may include the ticket-size of entry, filter for stocks, and specific price triggers, among others. Users may use past data such as earnings, estimates, and indicators to estimate future performance.