Finviz Stock Screener For Day Trading: A Practical Guide

Finviz.com is a powerful, free (with a premium option) stock screener that can be a game-changer for day traders. Sifting through thousands of stocks to find potential candidates for quick trades can be incredibly time-consuming. Finviz helps you narrow down the field based on specific criteria, allowing you to focus on the stocks that align with your trading strategy. This guide will walk you through how to effectively use Finviz for day trading, covering key filters and strategies to help you identify profitable opportunities.

This isn't about finding the perfect stock every time. Day trading is about probabilities and managing risk. Finviz is a tool to improve those probabilities by quickly identifying stocks that meet your pre-defined criteria for entry and exit. Let's dive in.

Understanding the Finviz Interface

Before we get into specific strategies, let's quickly familiarize ourselves with the Finviz interface. The main navigation bar offers several sections, but the most important for day traders are:

  • Screener: This is where the magic happens. You'll use this section to filter stocks based on various criteria.
  • Maps: Provides visual representations of market performance. Useful for quickly gauging overall market sentiment.
  • News: Aggregates news articles from various sources, keeping you informed about market-moving events.
  • Portfolio: Allows you to track your portfolio performance. (Less relevant for intraday screening).

We'll primarily focus on the "Screener" section in this guide.

Key Finviz Filters for Day Trading

The Finviz screener offers a vast array of filters. While many are useful for long-term investing, day traders need to focus on filters that highlight stocks with short-term potential for price movement. Here are some of the most important:

  • Price: This is crucial. You'll likely want to trade stocks within a specific price range. Consider your capital and risk tolerance. Many day traders focus on stocks between $5 and $50.
  • Volume: High volume is essential for day trading. It ensures liquidity, allowing you to enter and exit trades quickly without significant slippage. Look for stocks with average volume above 500,000 shares, and ideally over 1 million.
  • Relative Volume: This filter compares the current volume to the average volume. A relative volume greater than 1 indicates that the stock is trading more actively than usual, which can signal a potential breakout or breakdown. Aim for a relative volume of 2 or higher.
  • Change: This shows the percentage change in price for the day. Significant price changes can indicate momentum, which day traders often capitalize on.
  • Gap Up/Down: This filter identifies stocks that have opened significantly higher or lower than the previous day's close. Gaps often lead to predictable price action, making them attractive for day trading.
  • Volatility: This filter helps identify stocks with high price fluctuations, which can lead to more trading opportunities.
  • Float Short: The percentage of shares outstanding that are currently sold short. High short interest can lead to short squeezes, which can create rapid price increases.

Building Your Day Trading Screen: Examples

Let's create a few example screens to illustrate how to combine these filters.

Example 1: Momentum Stock Scanner

This screen aims to find stocks experiencing strong upward momentum.

  • Price: $5 - $30
  • Volume: Over 1,000,000
  • Relative Volume: Over 2
  • Change: Up at least 3%
  • Market Cap: Small or Mid (This can help focus on stocks with more potential for volatile moves)

This screen will show you stocks that are moving up significantly on higher-than-average volume. You can then analyze the chart to identify potential entry points based on your trading strategy.

Example 2: Gap Up Scanner

This screen focuses on stocks that have gapped up at the open.

  • Price: $10 - $50
  • Volume: Over 500,000
  • Gap Up: Over 2%
  • Float Short: Under 20% (This avoids focusing solely on short squeeze candidates, allowing for more diverse gap-up plays)

This screen will identify stocks that have opened significantly higher than the previous day's close. You can then look for continuation patterns or potential pullback opportunities.

Example 3: Short Squeeze Candidate Scanner

This screen aims to find stocks with high short interest that might be susceptible to a short squeeze.

  • Price: $3 - $20
  • Volume: Over 500,000
  • Float Short: Over 20%
  • Change: Up at least 1% (Indicates initial buying pressure)

This screen highlights stocks with a significant short interest that are starting to show signs of upward momentum. Remember that short squeezes can be very volatile and risky.

Beyond the Filters: Chart Analysis is Key

While Finviz helps you narrow down your list of potential trades, it's crucial to remember that it's just a starting point. You must always perform chart analysis before entering any trade. Look for:

  • Support and Resistance Levels: Identify key price levels where the stock has previously found support or resistance.
  • Candlestick Patterns: Recognize patterns that can signal potential reversals or continuations.
  • Moving Averages: Use moving averages to identify trends and potential areas of support or resistance.
  • Volume Confirmation: Ensure that price movements are supported by corresponding volume.

Risk Management: The Most Important Factor

Day trading is inherently risky, and proper risk management is paramount. Never risk more than you can afford to lose on any single trade. Always use stop-loss orders to limit your potential losses. Consider these risk management tips:

  • Set Stop-Loss Orders: Determine your maximum acceptable loss before entering a trade and set a stop-loss order accordingly.
  • Position Sizing: Adjust your position size based on your risk tolerance and the volatility of the stock.
  • Profit Targets: Have a clear profit target in mind before entering a trade.
  • Don't Overtrade: Avoid trading too frequently, especially when the market is volatile.

Common Mistakes to Avoid

  • Chasing Momentum: Don't jump into a trade just because a stock is moving up quickly. Wait for a pullback or a confirmation signal.
  • Ignoring Volume: Volume is crucial for confirming price movements. Don't trade stocks with low volume.
  • Failing to Set Stop-Loss Orders: This is a recipe for disaster. Always use stop-loss orders to limit your potential losses.
  • Emotional Trading: Don't let your emotions influence your trading decisions. Stick to your plan and avoid revenge trading.
  • Over-Leveraging: Using excessive leverage can magnify both your profits and your losses. Be cautious when using leverage.

Conclusion

Finviz is a valuable tool for day traders, but it's not a magic bullet. By understanding how to use the key filters and combining them with chart analysis and sound risk management, you can significantly improve your chances of success. Remember to practice consistently, adapt your strategies to changing market conditions, and never stop learning. Good luck, and happy trading!