How to use stock screeners effectively
Build scans that reflect your process, not the entire market.
Published · Last reviewed
A screener is a tool for narrowing the investable universe to candidates that match your trading process. Most retail traders use screeners backwards: they layer on dozens of filters until the result list contains exactly one or two stocks they already wanted to trade. That is not screening; that is confirmation bias with extra steps.
The disciplined version starts with what your process needs. If you trade momentum continuation on liquid US large-caps, you need a screener that filters for liquidity (dollar volume ≥ $50M / day), trend (price above 50-day SMA, 50 above 200), and recent strength (10-day return ≥ 5%). That's three filters. Adding a fourth — say, RSI < 70 to avoid the most overbought names — is reasonable. Adding a fifth, sixth, and seventh is where the over-fitting starts.
Filters should be orthogonal. A screener with "price above 200 SMA" and "above 50 SMA" and "above 20 SMA" and "1-month return positive" and "3-month return positive" is one filter (uptrend) repeated five times. The result list is much shorter than it should be and you are losing real opportunities. Pick the single filter that best captures the concept and move on.
Filters should be language-independent when possible. "RSI(14) ≤ 30 on the daily" is unambiguous; "stock is oversold" is not. Drogo's canonical screener slugs all use unambiguous filter combinations, which is why they have stable public URLs — the same slug means the same scan in 21 languages.
Always start from a liquid universe. Screening the full Russell 3000 with no liquidity gate produces dozens of micro-cap names where the slippage on a $50k position would erase the edge. Even if your style is small-caps, an explicit ADV floor (say, $5M / day) keeps you out of names where you cannot actually trade the signal.
Treat the screener output as a starting point, not a buy list. The 20–50 names you get back need qualitative review before any execution: where is the level structure, what is the news catalyst, is there an earnings event in the next two weeks, what does the order book look like at the open. Drogo's symbol page is designed exactly for this — one click from the screener row to a page with the news, levels, and the AI prompt pre-filled.
Step-by-step
- Define what your strategy actually requires
Write down 3–5 conditions a candidate must satisfy. If your strategy is "momentum continuation in liquid US large-caps", that is liquidity, trend, and recent strength — three filters, not seven.
- Pick a liquid universe first
Constrain to S&P 500, Nasdaq 100, or an explicit dollar-volume floor (≥ $10M / day). Skipping this step produces results dominated by names you cannot actually trade at size.
- Add orthogonal filters only
Each filter should capture a distinct concept. Adding "above 50 SMA" and "above 200 SMA" and "1-month return positive" is one concept (uptrend) repeated three times. Pick the strongest single expression and move on.
- Validate result count
A useful screener returns 10–50 names per day. If you consistently get 0 hits, your filters are too tight; if you get 200 hits, they are too loose to be actionable.
- Review qualitatively before trading
For each result, check news catalysts, earnings calendar, and level structure. Drogo's symbol page surfaces all three; the screener row links there in one click.
References & further reading
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Drogo Research — Quant editorial
Reviewed for factual accuracy; methodology linked below.