I am going to be very frank with you selecting the right stock is not easy. Trading is more of the selecting the right stock. The amount of data that is generated on various sub-indexes and triggers which we get are enormously outsized than a normal brain can digest and work on it.
Too many triggers are just bad for your trading health. Now the task is to sort out the most important information, discard the useless information and select the one as per our winning trading plan to execute.
How do you really KNOW anything for sure?
How do you know that you are getting to the right stock?
If you had all the money in the world but still had to have some kind of stock trading, what would you choose to do?
There is another school of thought, “[D]eal only in single derivative stock or index for the trading purpose; simple & selected stock which is not very cluttered at al”. Traders with such process do not need technical stock screener since their portfolio for trading is small and the entire portfolio of stock can be manually screened.
We do not advocate, attest or disagree with this school of trading.
If you belong to this school of trading then this article is not for you.
Advantages of Technical Stock Screener
Once you are aware and agree to the fact the Technical analyst believes that all the market information in the stock market is already factored into the stock price there should be no need for you to watch the business news channel or any other news channel for that matter.
The best example of what the advantages of technical analysis are most Technical Analyst started giving SELL signal even before the Satyam Companies started collapsing.
Filter Based on Multiple Criteria
Most of the technical analysis screener gives an option for multiple screeners. You can set the filter based on confirmation from both the filters. You can also first narrow down the sector and then set the filter this will give you the results only from the sector you have selected.
Advanced candlestick pattern is also possible with to screen with most of the filters. It can also give you the option of candlestick and types of the candlestick to narrow down your search results.
Combination of candlestick and moving averages is also possible. Another very popular screener is combination short-term and long-term patterns.
Long Term & Short Term Triggers
Spike or changes in trend is another important concept for entering a stock market or underlying.
All the above-mentioned trigger can be monitored individually or combined. Or Even multi-time frame triggers.
There is much contemporary stock screener which combine fundamental stock screener and technical stock screener.
Your long-term Investments and Index investment could be cautioned in long term only to ensure that you get Insurance for your holding. This is the time when learning options trading can come handy to you.
Technical analysts believe that all the information available in the market is factored in the stock price, and stock price is first to react even in case of insider information. In case of long-term investment, the change in trend can be known much in advance before the entire market reacts.
Based on the tool you select you will get the various option and if you are using an advanced version of the tool there are chances that you could be getting Proprietary Indicators with custom coding to suit your exact needs.
The list of possible options for technical triggers is mentioned below.
- Technical Screeners
- Patterns Screeners
- Divergences Screener
- Multi-time Frame Screeners
- Options Module
- Options Portfolio Tracker
- Advanced Tools
- Advanced Indicators
- Strategy Labs (BackTesting)
- Custom Coding TC Proprietary Indicators
Volatility is the Indicators that most people use for selecting the stocks. Higher the volatility higher is the movement in the price of the underlying in case of trading in derivatives.
One of the criteria can be selected as what is the volatility above or below you want the stock screener to give you the output.
This forms a vital part of Advantages of Technical Stock Screener.
The tangible variable has nothing to do with Technical analysis; it falls under Fundamental analysis, some traders trade in individual stock with very low trading volumes.
This is the tool for them to ensure that even low volumes stock are not missed the radar. Not all low volume stock are good trading opportunities. But a stock with high tangible value more than current market price has more probability of being a successful trading opportunity when compared to low tangible value; this is based on the Three Most Important Pillars of Value Investing.
Backtesting is one of the most important one. To create a winning trading plan even before you start you have to be sure that the strategy that you have narrowed down is going to work.
After finalising the trading strategy based on the technical indicator especially if they are index derivative or stock derivatives one can easily backtest the strategy.
After selecting few strategies to implement one can run a backtest on all the strategies and conclude the best one.
Technical stock screener are critical for a successful stock trading. They are undoubtedly the best means of acquiring a stocks’ information and further screening them to one.
However, if you’re not yet building your own technical analysis because you think it’s too time-consuming or too tedious you are underrating the potential Advantages of Technical Stock Screener holds.
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Also published on Medium.