Anyone that has been trading for a long time will attest to the fact that stock scanners came into the field and revolutionized the entire game. Things that traders used to spend 3 or more hours doing are now being done with some clicks within mere minutes. 

There are several stocks and charts to monitor; this used to be done by the trader, making trading quite monotonous and boring. As if that isn’t enough, you may spend hours watching the wrong stocks. It was always a game of chance as nobody will be there to tell you where to watch or where the action was going on. 

Stock scanners have been able to put an end to all these. With these tools, an investor is empowered to make the best choices that will draw a line between their losses and capital gains. You can read this article to learn more about capital gains. 

Stock scanners help save time, energy, and yes even your sanity. But how can you use them properly so that you’ll enjoy all of these benefits? Well, that is what we are here to tell you. In this article, we will be covering the essential things you need to know about stock scanners including how to use one. 

Let us get right into it by first explaining what it is. 

Stock Scanner – What exactly is it?

Stock scanners are software that allows a trader to search through several stocks that fall under given criteria. They are typically search tools. This means a stock scanner can be said to be to a trader what search engines like Google are to internet users. 

With this tool, you’ll be able to easily narrow down the stocks you want to make investments in by removing the ones you do not need. Luckily, many of these tools are free when it involves basic features, but some other advanced functions have to be paid for. While some brokerages might have stock screening tools on their websites, the popular tools are usually independent websites.

How it Works

The tool works by gathering potential stocks and then filtering them to fit your chosen criteria. As you select your chosen criteria, the stocks keep getting streamlined, in the end; the ones left will be only those that meet your criteria. 

Now, people tend to ask if stock scanning tools like trade ideas is worth it or whether they can be used to achieve one’s investment goals. The answer to that question is a resounding yes as this tool can be used by investors for several reasons. 

For some investors, who simply want to follow a particular strategy; this tool will save time for them by simply identifying the investments that will suit that chosen strategy. 

Take for instance; you want to invest in dividend stocks higher than 20 dollars per stock. When you search for this criterion on the tool, it will compile stocks that fit your criteria. You can even narrow down the list further by adding more traits to the search, like companies with stocks in a certain industry like hotels, financial services, and so on. 

While this tool is very resourceful, they sadly aren’t perfect and have some drawbacks. The major drawback of stock screening tools is that the tool cannot tell investors the particular stock they should invest in. Sure, they will help you to streamline the list to just a handful of stocks, but you will still have to do your research before you decide on the particular stock to invest in. 

How to Use One

To get the most out of the tool, there are certain practices that you’ll have to adopt. Below are some of these practices that can assist you to use a stock scanning tool to boost your investment growth:

1. Intraday Alerts

Intraday traders can set intraday alerts for moving stocks so they’ll be aware of when unique things are going on in the stock market. Intraday trading simply means trading within the day. People that trade this way usually trade during business hours and stand to benefit a lot from using intraday alerts on stone scanning tools. Visit https://investinganswers.com/ to learn more about intraday trading.

Some traders usually only run their analysis in the night so that they set their orders, but doing this can make you miss out on some big happenings.

You do not even need to be an intraday investor before you use these alerts as even long-term investors can benefit from them. How? Well, it is simple, with these alerts; non-intraday traders can notice momentum in the market early. 

2. Watchlist

So many stocks are traded actively in the United States alone. At any particular time, just a portion of these stocks can give an investor a real trading opportunity. The opportunity can be in any related market area. For instance, if the mobile phone industry is hot at the moment; you most likely will find amazing opportunities in mobile phone manufacturers’ stocks.  

So, monitoring these potential areas is one way to ensure you take advantage of the opportunities once they present themselves. One way to do this is to create a watchlist. With a watchlist on any stock screening tool, you can easily monitor a selection of stocks making it easy to find them and check their performance. 

You can even have more than one watchlist. For instance, you can create one for hot sectors while another can be for stocks that you trade actively. Now, your trading plan (click here to learn how to build a great trading plan) might matter when it comes to creating a watchlist. Even veteran traders use watchlists, so you will find a lot of benefits from doing so yourself. 

Conclusion

Every top investor or trader knows how important stock scanners are. With this tool, you can get the exact stocks that match the criteria you need and even go ahead to streamline the list to investments that are worth researching. With the tool, you can easily improve your chances of making better trades.