Trading Scanners: What You Need to Know
Screener vs. Scanner
First let’s clear up the difference between scanners and screeners. A scanner is designed for constant, real-time monitoring of stock data to provide signals for pre-determined criteria during trading hours. Screeners are designed for more ad-hoc analysis, or a point in time view of stocks that meet your certain criteria requirements. Screeners can be ran at any time, where scanners are generally useful during market hours.
Scanners are a great asset for traders, especially day traders. However, scanners are by no means required for you to be a good trader. An investor or swing trader might never have any use for a scanner. For day trading, scanners are actually a critical asset for traders.
Scanners, similar to screeners are ways to evaluate stocks based on specific criteria settings. For example, I only want to look at stocks that are under a $500 million market capitalization, trading 2x relative volume in the last two weeks, that are in a price range of $5-$20. This could potentially help me find stocks that are lower priced, with potential of a solid trend with volume.
In the grand scheme of things, scanners might seem overwhelming, but they aren’t. There are enough pre-loaded layout configurations already created that you don’t need to spend much time “tweaking” your scanner settings. You want to be using similar scanners to other traders in the market, so you are looking at the same stocks as the majority of traders.
That being said, there are benefits to having unique scanner settings that can find stocks that meet your criteria, and are also profitable signals. This just takes more time and attention to find the right combination of settings. You can download our scanner settings for Trade-Ideas at the bottom of the page.
How Are Scanners Used
Scanners can be used for a variety of reasons, and for different trading styles. This means that scanners can be interpreted in different ways. For example, a momentum stock for day trading might hit the scanner, that doesn’t mean jump into that trade. The point is to alert you to the activity that meets that criteria of something that has the potential to run. At this point, it’s best to pull up the chart of the ticker, and analyze what you’re seeing. If the chart does in fact look strong intra-day, with great volume, identifiable levels, trade setups, you would then be ready to potentially take a trade.
Whether it is a high of day break out, consolidation breakout, trend breakdown, adding on dips with respected stop level, etc. There are a ton of ways to use the scanners, but it’s important you have a strategy to back it.
A swing trader might take a slower approach to their scans. They might see the name come across their scanner, take the time to investigate and do their due diligence. If the stock checks most of your boxes as something worthy of a swing trade, then you can analyze where it is best to start a position and where you would likely exit the position, both for gains or losses.
Types of Popular Scans
Momentum – These are some of the most used scanners by all day traders. Momentum scanners help find stocks that are trading at high relative volume with fast price movement. This typically points traders in the direction of volatile stocks with a lot of attention. Ideally, these scanners can lead traders to find stocks that have the most potential to make a substantial move. It can also alert us to stocks with strong trends that can allow us to execute proper trading strategies with easy and identifiable levels.
Gap Scanners/Pre-Market – These are useful for helping day traders build a watchlist for the day. Typically stocks that are gapping up the highest during pre-market, are the stocks with the most potential for momentum and range for the day. This typically the result of news & press releases made by the company.
Options Calls/Puts – For options heavy traders, there are a ton of scanner combinations that can be used. Specifically, there are scans for finding tickers that are trading on higher options volume than normal. This can be in the form of a strategy scanner that meet pre-determined criteria as seen below. There is also also scanners that can look for higher call or put volume, relative to previous days. This is a great indicator to finding stocks that have unusually high options interest. These can lead to relatively bigger moves in the underlying stock price.
Strategy – Popular scans include strategy scanners. These are scans that are looking for a certain set of pre-determined criteria to match. It can be very simple, to very complicated. A simple strategy could be a scan that is looking for stocks that are trading at 52 week highs on high relative volume. A more complicated scan could include a number of additional criteria that really hone down on the type of stock/move the trader is looking for.
Specialty – There are also a ton of specialty type scans. These can be scans that monitor stocks with high short interest, that are trading higher on the day. You can set up scans that monitor sectors, like EV or SPACS. There is really no limit to how you want to set up your scanner criteria.
Swing Trading – Of course for swing traders, there are scans that are designed for a more long term, holistic approach to the trade. As seen below, swing scanners can be based on more technical, and even chart related setups. For example, using moving averages as criteria to sift through stocks with high relative volume can be an easy way to find strong trends.
Common Measurements Found On Scanners
Symbol – Ticker of the company hitting scans.
Time – The time the alert is sent by the scanner.
Type – Shows the type of alert represented by a symbol. There are a lot of these, but the most common are high of day & low of day. Use link at bottom to see all types.
Strategy Name – When you create a custom parameter set for scans, there is a name for this parameter set, typically a strategy.
Price – Price of the stock at the the time of scan.
Gap $ – The amount a stock moved up or down in pre/post market trading in $ terms.
Gap % – The amount a stock moved up or down in pre/post market trading in percentage terms.
Chg Close % – The amount a stock has changed in the day vs. the last closing price in percentage terms.
Chg Close $ – The amount a stock has changed in the day vs. the last closing price in $ terms.
Chg 10 Min % – The amount a stock has changed in price over the last 10 minutes in percentage terms.
Rel Vol – Relative volume is the amount of volume a stock is trading relative to its average. Typically stocks on scans will have high relative volume.
Vol Today Shr – The amount of shares traded on the day.
Vol Today % – The amount of volume trading on the day vs. the average daily trading volume in terms of percentages.
Vol 1 Min % – This represents how much volume is trading in the minute vs. how much volume is expected to trade in a 1 minute period.
Vol 5 Min % – This represents how much volume is trading in the minute vs. how much volume is expected to trade in a 5 minute period.
Today’s Rng % – This is equal to today’s high minus today’s low.
Earn Date – The amount of days until or after a scheduled earnings report. 0 means midnight this morning. 1 means midnight tonight / tomorrow morning. We do not count weekends, so -10 means 2 weeks ago.
% Opts Vol Today – The amount of options traded in the day vs. the average amount of options traded daily in terms of percentage.
Opts Vol Today Contracts – Total amount of options contracts traded on the day.
Put/Call – The percentage of puts to calls being traded on an associated ticker.
Pos Rng % – Where the stock is currently trading in relation to the range of the price on the day, in terms of percentage.
Pos Lifetime Rng % – Where the stock is currently trading in relation to the range of the price of the lifetime of the stock, in terms of percentage.
Pos 20 Day Rng % – Where the stock is currently trading in relation to the range of the price range of the last 20 days, in terms of percentage.
Shrt Flt % – Short percentage of the float of any given ticker.
Flt (Shr) – The amount of shares in the float of any given ticker.
Count Alerts – The amount of times a specific alert has hit the scanner in a day. Check out this helpful guide from Trade-Ideas to get all the information on reading their scanners: http://bit.ly/Trade-Ideas-Info
Useful Scanner Resources
There are typically screeners & scanners built into most brokers. This would be a great place for you to start looking for stocks and adding them in to your watchlist. Alternatively, there are some really high quality third party platforms that provide exceptional results.
Finviz Screener makes it easy for you to sort stocks by criteria that suits your style. This is one of the most popular screeners in the industry. Not only that, Finviz mocks up charts of the stocks you screen for that are already pre loaded with basic technical indicators. They break it into main categories such as Fundamentals, Descriptive and Technical. As seen in this screenshot, I sorted by a few criteria and had them display as charts. You can easily click into them individually and get a TON more information if needed. I think this is one of the best free trading tools available for both aspiring and experienced traders.
Trade-Ideas – If you’re looking for a scanner, there are a few great options out there. We personally prefer and recommend Trade-Ideas for the serious day trader. If you choose this route, we can provide you with basic scan layouts for your settings. These scanners have been around for a while, and you can find that most professional traders will use some sort of Trade-Ideas layout. They also have an enhanced AI feature on their product which some traders prefer to sign up for. However, for basic scanning, the STANDARD plan will get the job done. You can load our most current layout for Trade-Ideas using the load from cloud link option. Here is the link to copy and paste: https://www.trade-ideas.com/Cloud.html?code=3c92cf8e4eb6c9a9680b4478aa280762
