What is a Stock Screener and How Can Traders Use It to Their Advantage?
Making good stock selections is vital when it comes to successful investing. Traders will likely want to learn how to choose the stocks that will give them the best return on their investment. There are thousands of stocks to choose from, and choosing a good stock can prove to be quite the challenge. It is virtually impossible to sort through each and every stock and study the data of each one- or is it? A stock screener has now made this a possibility. Screeners can help traders pull up only the stocks that meet certain criteria. If you are new to investing, you will definitely want to learn more about stock screeners and how they can benefit you.
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What is a Stock Screener?[/caption]The Basics of Screeners
Screeners are used to search for certain stocks that will meet the criteria provided by the trader. They are made up of three different parts. First, they have a database of all companies that participate in stock trading. Next, they have a set of questions for traders to answer in order to provide information about the types of stocks they want to invest in. Finally, they have a screening program that helps to sort the companies based on the criteria indicated by the trader.
Using the stock screener is a lot easier than it may sound. You will start by answering questions regarding the size of the stock, prices of the stocks, current trends, price-to-earning ratio, volatility, profit margin and debt-to-equity ratio. Once you answer these questions, a list of stocks will be provided to you that meet your specific requirements. The good news is that most of the questions that you answer will be based on a measurable factor. Quantitative analysis is very important when it comes to choosing the right stock to invest in.
Types of Screeners
Now that you know a little about how stock screeners can benefit traders, it is time to learn more about the types of screeners available. There are two basic types- customizable screeners and predefined screeners. Customizable screeners allow you to customize your screening questions to bring you the most accurate results. Predefined screeners have preset screening questions that are commonly used by many investors. These may be best for beginners.
Key Factors to Remember When Using a Screener
It is really important to remember that while stock screeners can be a really great tool for traders when it comes to choosing the right type of stock, it is not always fool proof. Stock screeners will generally only use the quantitative data about the stocks, and will not factor in any of the qualitative factors. You will always want to do a bit of research to learn more about customer satisfaction, along with any pending changes. Another thing to keep in mind is that some stock screeners are not as up-to-date as others. Choosing timely databases is vital if you really want to get the best results.
Hopefully these tips will help!
If you would like to learn more about stock screeners, be sure to click on this link because it provides a nice video that shows you how to implement the use of a Google stock screener.
Also, if you would like to learn how to invest like Warren Buffett, this link has some of the best videos on the web. You'll be sure to learn a lot.
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