You know that feeling you get when you see someone you follow on Twitter, Facebook or Profit.ly score big on something within your price range? You start to wonder, how in the hell did that dude know about that stock?
There are more than 10,000 different stocks available for you to purchase right now. How are traders finding these awesome stocks right before they break out or make an extended move? The answer is FinViz, a free to use online utility.
When you arrive at FinViz, click on Screener. With more than 70 different categories under the ALL section, finding this website is just the beginning. Making sense of what everything means, all of the settings and the proper search criteria is another subject all together.
Remember my trading style will be different from yours and the next man. The settings I’m about to share can help you find stocks that have price action and volume. Because there are multiple items that need to be selected, it’s best to create a free account. Make use of the Presets feature to save our options.
Price Action = How much a stock fluctuates in price throughout the day.
Volume = How many times the stock has been traded that day.
Visit FinViz and click on Register in the top-right corner. After you’ve signed into your free account, click on Screener, then click on All to see everything. Enter all of the following 7 filters. Click on My Presets, then Save Screen when finished.
Traders use FinViz and set filters like the ones above to identify upcoming plays for the next day. Upgrading to a premium account, FinViz offers intra-day charts to help traders locate potential plays happening all throughout the day.
I’d like to challenge you to use the filters above then watch the traders you follow on Twitter throughout the day to see if any of the potential plays you found are being traded. You may have to change up the settings a little to find the right mix of stocks that fit your style and niche.
What to do with the information.
After you’ve saved the scan, run it. Click on My Presets, then select your recently created filter. The next thing we’ll need to do is sort by Volume. Click on the Volume column a couple of times to sort by greatest volume first.
Within the search results, I start looking for stocks within my price range. If it’s more than $25 a share, I wont even look at it. The stocks I can afford will need to have several characteristics before they’re added to my daily watch list.
The first thing I’m looking for is volume. I want stocks that have been traded more than one million times the day before. Stocks with low volume tend to go sideways all day. I’m looking for the movers. With a lot of people trading a particular stock, it makes the process easier to get in and out of the trade.
I then look for stocks that have been making moves for several days.
This is referred to as the Average True Range. Stocks that are heavily traded have more probability of fluctuating in price throughout the day. If you can find a volatile stock that has increased one or more dollars each day for a week. That’s probably a good stock to keep your eye on.
The last thing I look for are familiar names. Stocks that I’ve watched before or know something about. A stock that went crazy last month may do the same again based on hype, news or current events.
On a good day I’ll find 3 to 5 stocks on FinViz that get added to my watch list.
For newbies, here is a starting point. This scan will help you find possible momentum setups for the next day. The data provided on FinViz is not up to the minute unless you’re a paid subscriber. I use the free version as I only visit the site in the evening to scan for tomorrows plays.
Momentum trades can turn into shorts after the hype has died down. This scan is a nice place to start as it opens the door to a number of different trades.
Whats your best method for finding good stocks? Do you have a Finviz.com preset that you’d like to share with others? Please leave your comments below.