Beat The Market With Screeners

Feb 27, 2020 12:15 PM 616 views

The sheer volume of stocks present on the stock exchanges makes it very hard to pick the right stock that matches your strategy. Fortunately, IIFL's stock screeners can easily help you pick the right investments that meet your standards and trading strategy. "A stock screener is a tool that investors and traders can use to filter the thousands of stocks based on user-defined metrics." These tools help prioritize stocks that meet certain financial criteria fundamentally helping YOU make better investment decisions.  

For example: If you’re scalping for stocks that are trading in high volumes you can simply use the Price/Volume screener that will give you a list of stocks that have been trading in high volumes. Keeping in mind, you must be wondering how the screeners give us a list of stock? To answer that question, screeners are dependent on certain factors that scalp stock for you. Those factors are as follows:

  • A set of variables (these change regularly) 
  • A screening engine that helps find these organizations that meet the criteria set for the screener 

Making use of the screener's feature is quite simple. However, you have to answer a series of stock-specific questions that will enable the screeners to do their job. Examples of questions have been given below. 

  • Your preference of stocks to invest in - Large-cap or Small cap 
  • Are you looking for stock prices that are at all-time highs or organizations that have a stock price below their median. 
  • What is the P/E (Price-to-earnings ratio) of the stock and is that acceptable to you
  • Are you looking to invest in a specific industry? 
    *P/E ratio is the ratio of the companies share price to the companies earning per share. This ratio is mainly used to value companies and find out whether they are undervalued or overhauled.

Once you have identified the nature of the stock you desire to invest in by answering the questions mentioned above, you can get a list of companies that meet the same requirement. 

To illustrate, if you are looking for stocks with a low P/E ratio and that organization has a strong history of sales and is a large-cap stock you can simply look at the low PE and high EPS growth screener that directly coincides with your investment criteria. This screener will give you a list of stocks that you can analyze and invest in. An individual would look for stocks with a lower P/E ratio because those organizations usually tend to be undervalued therefore by using the screener's feature you can easily get a list of stocks fitting this criterion. Moreover, investments made in organizations with lower P/E ratios and strong revenue models can turn into profit in the short-term once the market corrects itself.  

Moreover, the variables that define the screeners are based on quantitative analysis. So if you usually look at the price and volume-based indicators screeners are an amazing tool that will add a quantitative aspect to your original trading strategy allowing you to select enumerated profit-making stocks. In addition, you may not have the time to track a particular stock and may miss your point of entry. However, not to worry, screeners will give you multiple similar stocks within a similar price range simultaneously tracking the revenue, volatility, market capitalization, and different financial ratios that will add to your pre-existing analysis.

A challenge associated with the screeners is not knowing what criteria you are looking for. In the case where you are confused about the criteria, screeners may not be as useful, nonetheless, they can help you in picking your criteria. Similarly, looking at qualitative data such as news can help you evaluate price movements. 

Screener's Available on IIFL Markets app: 

1. Candlestick: Candlestick screeners find patterns among daily and weekly candlesticks for bullish and bearish patterns.

2. Expert: These screeners require a deep understanding of the different variables. Moreover, expert screeners combine fundamental and technical analysis mainly utilized by experienced traders. 

3. Fundamental: The fundamental screener uses only fundamental data such as revenue, market capitalization, P/E and then categories the stock into various segments.

4. Moving Average: Moving average screeners are indicators that showcase trending price movement. 

5. Price / Volume: This screener showcases various indicators based on price and volume such as 52 weeks high, most actively traded stocks and a lot more.

6. ShareHolding: This screener mainly highlights if an institution has recently purchased stocks of an organization. This screener can be extremely helpful for longterm investments.

7. Technical: Lastly, the technical screener uses technical data, in other words, it finds patterns using different studies that determine price movement.

How to Use:

The screener's section is very easy to find. All you have to do is go to the main menu and click on the third option on the top of the page, also highlighted in the image below. 

After clicking on the screener's category on the main menu, you will be redirected to the following tab below shown in the image below. After having an understanding of what kind of stock you want to invest in simply click on any of the following screener's segments. The segments have also been explained above. 

For example: We wanted to invest in high volume stocks therefore I decided to use the Price / Volume section. This section has further been broken down into smaller segments ensuring you invest only in the type of stock you that matches your investment objective. When a stock has a high trade volume that indicates multiple individuals own this particular stock and it has the potential to be volatile as short-term price action can be determined. 

After clicking on the high-volume segment our screeners instantly give you the stocks that meet these criteria, also shown in the image below. Now, it’s up to pick the right stock at the right time and enjoy the benefits of this exceptional product. Screeners can truly help you BEAT the MARKET

Click here to download our app now and use the screener's section.

Tags: #Finance

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