Why Do Traders Need Screeners?

By Melissa Brook, contributor at Benzinga.

If you’re committed to trading stocks, it’s often an enormous undertaking. So many variables affect your day, from market swings to company “oopsies” to economic situations. What’s the best way to figure out the best tactic to take when you’re a trader?

Let’s dig into what screeners have to offer and examine exactly why traders need them as part of their tool-wielding arsenal.

What are Screeners?

Stock pickin’ ain’t easy. Massive numbers of companies, together with the (ridiculously large) volumes of data on the internet make stock picking an almost impossible, arduous task. How do you cherry-pick the right data to pay attention to and shovel the rest into the junk pile? 

Anyway, what do stock screeners do? Stock screeners steer you toward the right companies, or at least those you think will benefit your (hopefully already) best laid and best-strategized plan.

Stock screeners are like sieves. Remember when you went to the beach as a kid and had one of those plastic sand-sifting sieve tools? (I vividly remember mine — it was yellow and cracked in the middle.) That’s exactly what a stock screener does. When you know what types of companies you want to tag for investment, you can track them. Because let’s face it. You can’t track ‘em all on your own. Stock screeners limit your exposure to stocks that fit your exact needs and parameters.

Why Traders Need Screeners

Did you get it immediately after I mentioned “plastic sand-sifting sieve tool?” (By the way, that might not be quite the right name for that tool.) If you did, brava. It’s the reason why you, as a trader, need a good screener. Here are a few more reasons why you need one.

Reason 1: You lift analysis paralysis. 

You can analyze hundreds of stocks in a short period of time, so you weed out those pesky stocks that don't meet your requirements at all. Not looking for small-caps? Perfect. Toss ‘em to the side. In other words, you hone in on the stocks that meet your definition of success. 

By the way, do you need “trader” status to use a stock screener? No way. Slower-moving investors can use them, too — even if you’re a person who has a 50-year time horizon.

Analysis paralysis is a thing of the past with a stock screener, for sure.

Reason 2: You’re better than a bloodhound. 

Mystified? 

The analogy is this: You can track stocks’ movement like a bloodhound with a nose to the ground. You can easily figure out what stocks have significant gains or losses during any given day. Let’s say a particular stock rises like crazy over a single day or more. You’re more than likely going to watch that stock like a hound dog (with its eyes on a raccoon) and try to buy it.

Reason 3: You cut your research time in half (or more!). 

You want to know as much as possible about the companies’ stock you trade. You might see fleeting news about 16 different companies in your newsfeed. But which news is most promising? Accurate company research is critical, and you’ve got dozens of questions. 

Among those swimming around in your head:

• What breaking news or media events have covered this company?
• Have I heard rumors about this company’s future? Are they positive or negative?
• Has the company signed a deal with a larger company?

A good stock screener cobbles together this information to help you answer these questions (and all the other questions you have). 

Good traders want to be able to have a pulse on various stocks’ intraday trading ranges, which can also put together summaries of how dramatically stocks climb or fall during the day and any other news that’s pertinent. You also want to know which stocks will be on the up-and-up long-term, as opposed to stocks starting to tick-tock downward.

Steps to Pick the Right Screener 

Here’s how to pick the right screener for you, whether you stick to stocks or venture into forex trading.

Consideration 1: Does it let you chart patterns easily?

Quick, back to the beach as a kid. You know how you delighted in watching your footprints follow behind you? And how your parents and siblings made footprints in the sand, too? When you trade, you look for footprints — chart patterns — as an indication of what will happen next. Typically, stocks stack in your favor in a certain way.  Once you really get each pattern, you know it’s less likely that certain patterns will diverge crazily — like your brother’s footprints dancing away from yours in the sand.

Charting patterns teaches you anticipation and helps you understand what could potentially happen next. Chart patterns break it down to a science and looking for a screener that “clicks” with your method of charting can help you determine appropriate stop-loss and take-profit levels.

Chart analysis is a major part of your trading strategy, so make sure the screener speaks your “language.”

Consideration 2: Does it provide technical indicator education?

Technical indicators boil raw price and volume data in a pot and manipulate so you can see factors like momentum, trend strength or volatility. All of these things can help you make better trades. When you’re a trader, technical indicators must be a part of your vocab, including: 

• Moving average (MA)
• Exponential moving average (EMA)
• Stochastic oscillator
• Moving average convergence divergence (MACD)
• Bollinger bands
• Relative strength index (RSI)
• Fibonacci retracement

There are hundreds. In short, when you’re beginning to trade, you want a scanner to help you intuitively understand these indicators.

Consideration 3: How does it interface with the news?

Your screener should effectively navigate news that can affect the price of the stock. It can be a news story, a negative company announcement, an SEC filing and even Facebook mutterings.

You want news powered by AI so you dive past news titles and headings, and even dive into indirect relationships, such as geopolitical events. Everything is intertwined, and your stock screener should quantify in every direction possible.

What you can’t see, you can’t act on. 

Best Screeners 

Which screeners are best? Check out two can’t-miss screeners.

1: Benzinga Pro

Benzinga Pro’s easy-to-use screener gives beginners to professionals everything you need for market news and research in a customizable platform. Powered by the Benzinga Pro Newsfeed, you’ll get lightning-fast market news and data to inform your trading decisions. You can choose what data you see in the results using different views, including: 

• Overview 
• Valuation 
• Financial 
• Trend-Following 
• Last Candle

You can customize your views by adding or removing filters so you only see the data you’re looking for. 

You can access this screener with a Benzinga Pro subscription, which includes other tools like the Newsfeed, Squawk, Watchlists and more. 

Benzinga Pro is more than just a screener and newsfeed. Get audio alerts to key headlines and breaking news with Audio Squawk. Other features include choosing your candle interval, downloading a CSV report and choosing your screener refresh rate. 

From 6 a.m. to 6 p.m., the Benzinga Pro team monitors the news you need to know. Use movers and screeners to scan for stocks tailored to your trading strategy. 

You’ll also get access to signals, notifying you to events like block trades, price spikes, opening gaps, and more. 

You can also join the chat community to ask questions, get trading ideas, and more with traders of all experience levels. 

Get access to all of this and more when you start a free 14-day trial of Benzinga Pro.

2: Tradespoon

Tradespoon makes trading as easy as 1-2-3 — it’s the first thing you see on Tradespoon’s website, and it’s true: Tradespoon offers multiple opportunities for education. Weekly webinars and a members-only large collection of video topics like technical and stock fundamental analysis and options trading basics can help you if you’re on training wheels.

Each Tradespoon Tool makes you a more consistent trader. Tradespoon’s tools hand over predictive analytics and real-time market data to help you find winners more often. Learn which stocks to trade, how to lay your proverbial cards and when to get in and out. 

What if you want help based on your needs and your specific portfolio? (First of all, good for you!)

Tradespoon offers one-on-one coaching services for traders who want to improve their trading results. You’ll have to be accepted in the program but you can join regardless of your own skill level.

Pricing ranges from free (for its video training library and weekly live webinars) to $125 per month for its premium package. Its two other subscription packages are Stock Forecast ($58 per month) and the Tools package ($83 per month).

You Deserve the Best Stock Screener

There’s no question about it — if you want to be successful in the markets, you’ve got to have the best stock screener. That doesn’t mean you need to shell out thousands of dollars. In fact, some stock screeners are free (a bonus if you get extras, like a video training library and weekly live webinars to boot) but the most in-depth screeners usually charge a fee.