How To Customize Finviz Screener Settings For Maximum Profits
Finviz is a powerful, free stock screener that can help you identify potentially profitable trading opportunities. However, the default settings are broad and often return a massive list of stocks, making it difficult to pinpoint the real gems. To truly unlock Finviz's potential and maximize your profits, you need to customize the screener to match your specific trading strategy and risk tolerance.
This guide will walk you through the key areas of the Finviz screener and show you how to tailor the settings to find the stocks that align with your investment goals. By the end, you'll be able to efficiently filter through thousands of stocks and focus on the ones that have the highest probability of success. Let's dive in!
1. Understanding the Finviz Screener Interface
Before we start tweaking settings, let's quickly familiarize ourselves with the Finviz screener interface. You'll find the screener under the "Screener" tab on the Finviz website. The interface is divided into three main sections:
- Descriptive: This section allows you to filter stocks based on fundamental characteristics like market capitalization, industry, country, and earnings dates.
- Fundamental: Here, you can filter based on financial ratios and metrics like P/E ratio, EPS growth, debt/equity ratio, and dividend yield.
- Technical: This section focuses on technical analysis indicators such as moving averages, RSI, MACD, and volume.
Understanding where each filter resides is crucial for efficient screening.
2. Defining Your Trading Strategy
Customizing your Finviz screener starts with a clear understanding of your trading strategy. Are you a value investor looking for undervalued companies? A growth investor seeking high-growth potential? Or a momentum trader riding short-term trends? Your strategy dictates which filters are most important.
For example, a value investor might prioritize low P/E ratios, low price-to-book ratios, and high dividend yields. A growth investor, on the other hand, might focus on high revenue growth, high EPS growth, and strong return on equity. A momentum trader will be more interested in technical indicators like relative strength and moving average crossovers.
Knowing your strategy is the foundation for effective Finviz customization.
3. Mastering the Descriptive Filters
The "Descriptive" filters are your first line of defense in narrowing down the universe of stocks. Here’s how to use them effectively:
- Market Cap: Choose a market cap range that aligns with your risk tolerance. Large-cap stocks are generally less volatile but offer lower growth potential, while small-cap stocks are more volatile but can offer higher returns. Consider filtering for Mid-Cap or Small-Cap stocks if you are looking for faster growth.
- Industry: If you have expertise in a particular industry, focus your search there. This allows you to leverage your knowledge and understanding of the sector.
- Country: If you prefer to invest in domestic stocks, limit your search to the United States. However, don't be afraid to explore international markets, especially emerging markets, for potential growth opportunities.
- Exchange: Select your preferred exchange (e.g., NYSE, NASDAQ, AMEX). This can help you avoid over-the-counter (OTC) stocks, which are often less liquid and more volatile.
- Earnings Date: Use this filter to avoid stocks that are about to report earnings if you prefer to avoid earnings-related volatility.
Example: If you are looking for growth stocks, you might filter for "Small-Cap" stocks in the "Technology" industry listed on the "NASDAQ" exchange.
4. Fine-Tuning with Fundamental Filters
The "Fundamental" filters allow you to delve deeper into a company's financial health and performance. Here are some key filters to consider:
- P/E Ratio: A low P/E ratio can indicate an undervalued stock, but be sure to compare it to the industry average.
- EPS Growth (Q/Q): Look for companies with consistently high earnings per share growth.
- Revenue Growth (Q/Q): Similar to EPS growth, high revenue growth indicates strong demand for the company's products or services.
- Debt/Equity Ratio: A low debt/equity ratio indicates a company with a healthy balance sheet.
- Dividend Yield: If you're looking for income, filter for stocks with a high dividend yield.
- Price/Book Ratio: A low price-to-book ratio can also indicate an undervalued stock.
- Return on Equity (ROE): A high ROE indicates that the company is effectively using its equity to generate profits.
Example: A value investor might filter for stocks with a P/E ratio below 15, a debt/equity ratio below 0.5, and a dividend yield above 3%.
5. Leveraging Technical Indicators for Entry and Exit Points
The "Technical" filters allow you to identify stocks that are exhibiting specific technical patterns or signals. Here are some common technical filters:
- SMA20: Price above or below the 20-day Simple Moving Average.
- SMA50: Price above or below the 50-day Simple Moving Average.
- SMA200: Price above or below the 200-day Simple Moving Average. This is often used to determine the overall trend of a stock.
- RSI (14): Relative Strength Index. Values above 70 indicate overbought conditions, while values below 30 indicate oversold conditions.
- MACD Signal: MACD Histogram crossing above or below the signal line. This can indicate a potential buy or sell signal.
- Volume: Look for stocks with above-average volume, which can indicate increased investor interest.
Example: A momentum trader might filter for stocks that have recently crossed above their 50-day moving average with above-average volume.
6. Combining Filters for Powerful Screening
The real power of Finviz lies in combining multiple filters to create highly specific screens. For example, you could combine fundamental filters like low P/E ratio and high EPS growth with technical filters like a 50-day moving average crossover to identify undervalued growth stocks that are showing signs of momentum.
Experiment with different combinations of filters to find the ones that work best for your strategy. Don't be afraid to adjust your filters based on market conditions.
7. Saving Your Screens for Future Use
Once you've created a screen that you're happy with, save it! Finviz allows you to save multiple screens, so you can easily switch between different strategies. This saves you time and effort in the long run.
8. Backtesting and Refining Your Screens
The most crucial step is to backtest your screens. Use historical data to see how your screen would have performed in the past. This will help you identify any weaknesses in your filters and refine them accordingly.
Remember that past performance is not necessarily indicative of future results, but backtesting can provide valuable insights into the effectiveness of your screening strategy.
9. Staying Updated and Adapting
The market is constantly changing, so it's important to stay updated on the latest trends and adapt your screens accordingly. Regularly review your filters and make adjustments as needed. This will help you stay ahead of the curve and maximize your profits.
Conclusion: Your Path to Profitable Screening
Customizing your Finviz screener is an ongoing process. By understanding the different filters, defining your trading strategy, and backtesting your screens, you can create a powerful tool for identifying profitable trading opportunities. Remember to stay updated and adapt your screens as the market evolves. With practice and patience, you'll be well on your way to maximizing your profits with Finviz. The key is to be specific, consistent, and always be learning. Good luck and happy screening!