A stock screener is one of the most powerful tools that investors use to identify new trading opportunities and potentially profitable investments. Talking about technical stock screeners, they allow you to filter out the stocks based on the technical indicators, the same way as a stock chart. They help in performing in-depth technical analysis in minutes, hence saving a lot of time and effort.
In this guide, we will tell you everything you need to know about a technical stock screener in India and also discuss how you can select the best one for yourself. So, without any further ado, let’s dive in!
Technical analysis uses mathematical calculations to predict the future price of trading instruments.
What is technical analysis?
Technical analysis aims at forecasting the price movement of stocks or any other tradable instrument that is usually subjected to the forces of demand and supply. These trading instruments can include stocks, futures, bonds, currency pairs, etc.
The technical analysis takes mainly three factors into consideration while forecasting the price movement — Price, Volume, and Moving Averages. With the help of these factors, you can determine the direction in which your stock or fund is prevailing.
Now the question is, how technical analysis is used?
To support technical analysis trading, various researchers and trading experts have developed hundreds of signals and patterns across the industry. Besides, there are various software and tools like stock screens that are capable of forecasting the price movement by using various technical indicators.
Let’s now understand what a technical stock screener in India is, and how it can help you in performing technical analysis.
What is a technical stock screener?
Before discussing a technical stock screener in India, it is important for you to understand the difference between technical and fundamental analysis.
Technical analysis is purely based on mathematical calculations, called the “technical indicators” that take into account the trading volume, stock price, and the speed of price movement as key variables. The main aim of these indicators, as mentioned above, is to suggest to you the probable price of the stocks in the near future.
On the other hand, fundamental analysis allows trades to know if the company is worth investing in or not. Usually, the fundamental analysis focuses more on the financial statements of the company than the price movement of its stocks.
Performing technical analysis using a technical stock screener
The main benefit of using technical stock screeners is that you can use multiple technical indicators while filtering the stocks. Two or three indicators pointing in the same direction of price movement are always a better option than using a single indicator. So, in the end, you get a list of more promising and potentially profitable stocks for making valuable investments.
However, there are some guidelines you should keep in mind when using a technical stock screener in India. First of all, know about each and every indicator you’re using.
It is very important to understand what a particular indicator hints at and how it can be interpreted before adding it to your technical stock screener. The reason is simple, misinterpreting the technical indicators can cause a lot of uncertainty and confusion that will lead to poor decision making.
What to look for in a technical stock screener in India?
Although there are many stock screeners available in the market, what technical screener suits you the most depends upon your trading style, budget, technical requirements, and more.
Below are some things you need to consider at the time of finding the right technical stock screener in India :
Stock screeners are available as both web and mobile applications. Generally, desktop screeners require high computing power. So, if you don’t have a computer, then prefer having a web-based stock screener.
With hundreds of technical screeners available in the market, there is a vast budget range. Some stock screeners may cost thousands, while some others may be available for free or available on a subscription basis. You can select any screener based on your budget. Moreover, if you’re a beginner, then you can use a free tool but know that it comes with ads.
Understand the learning curve. Some screeners can be very complicated and require a lot of statistical knowledge and even programming skills. But there are some others that can be used just like any other mobile application. If you’re a beginner, then prefer using an easy-to-use screener.
If you’re planning to invest in stocks within a particular industry, then make sure the screener you’ve selected covers that industry in its database.
Make sure that your stock screener stays fresh and updated so that the data it shows is most recent and up to date. Also, different screeners update at different times, so make sure to have a look at these timings.
Technical analysis is one of the most effective ways to predict the future value of stocks. In this guide, we have discussed how you can perform effective technical analysis using a technical stock screener in India, easily and quickly. We hope it helps!