Beginner’s Guide: Post 25
Picture this: You’ve done the hard work. You’ve built your first trading plan, complete with specific entry rules, exit criteria, and the exact chart patterns you’re hunting for. You know what you’re looking for.
There’s just one problem.
The U.S. stock market has over 6,000 stocks moving simultaneously every trading day. How on earth are you supposed to find the handful that actually match your setup without clicking through hundreds—maybe thousands—of charts until your eyes glaze over?
Here’s the deal: Before stock scanners existed, traders spent 3-4 hours every morning manually flipping through charts, desperately trying to find opportunities before the market opened. They’d build watchlists by hand, miss incredible setups, and frankly, waste a ton of time on the boring, monotonous work that computers can do in seconds.
Those days are over.
Stock scanners are your filtering tool—think of them as a search engine for the stock market that instantly shows you only the stocks matching your specific criteria. In this guide, our team will walk you through everything you need to know about stock scanners: what they are, why day traders rely on them, the different types available, and most importantly, how to actually use them the right way without falling into common beginner traps.
Let’s dive in.
What is a Stock Scanner? (And Why Every Trader Needs One)
Stock Scanner Definition
A stock scanner is software that filters through thousands of stocks almost instantaneously, searching for the exact criteria you define. It’s your personal assistant that never sleeps, never gets tired, and can analyze more data in five seconds than you could manually review in five hours.
Here’s how it works: You tell the scanner, “Show me only stocks that are up more than 5% today, trading above 500,000 shares in volume, and priced between $10 and $50.” The scanner then combs through all 6,000+ stocks, filters out everything that doesn’t match, and presents you with a clean, manageable list of candidates.
Think of a stock scanner as a search engine for the stock market. When you search Google, you don’t manually visit every website on the internet—you type in what you’re looking for and let Google filter the results. Stock scanners work the same way for trading opportunities.
Without a scanner? You’d be clicking through endless charts hoping to stumble upon your setup. Why torture yourself when technology can do the heavy lifting?
Stock Scanner vs. Stock Screener: What’s the Difference?
You’ve probably heard both terms—stock scanner and stock screener—used interchangeably. And honestly, for most casual conversations, that’s fine. There’s no trading-language police.
But there is a technical difference worth knowing, and it comes down to speed and data freshness.
Stock screeners were developed back when the internet was in its infancy. They typically use end-of-day data and are designed more for longer-term investment strategies. You’d log in each evening, set your criteria (like “stocks above their 200-day moving average”), and get a static list to review. Screeners are basically low-tech filtering tools better suited for swing traders and investors.
Stock scanners, on the other hand, came about as technology evolved. These are powerful programs connected to real-time data feeds that scan stocks for trading opportunities as they happen throughout the day. Scanners continuously monitor the market and push alerts to you the moment a stock meets your criteria—you don’t even have to ask. This makes them ideal for day traders who need to react fast to intraday price movements.
The key distinction: Screeners use end-of-day data and wait for you to initiate the search. Scanners provide real-time data and proactively alert you as conditions change.
For day trading? You want a scanner with live data. For building a long-term portfolio? A screener might be perfectly adequate.
That said, many modern platforms blur these lines and offer both functionalities. The important thing isn’t getting hung up on terminology—it’s understanding that real-time data matters for active trading.
Why Day Traders Use Stock Scanners (The Real Benefits)
Look, we could tell you scanners are “helpful” and leave it at that. But let’s be honest about what they actually do for your trading.
Time Savings: From Hours to Minutes
Remember those old-school traders spending 3-4 hours every morning manually building watchlists? That wasn’t some badge of honor—it was inefficiency.
A stock scanner does that same work in under a minute.
Instead of clicking through hundreds of charts hoping to find a stock that’s gapping up with strong volume, you run a scan and instantly get a filtered list of exactly what you’re looking for. The time you save isn’t just convenient—it’s time you can redirect to the parts of trading that actually matter: analyzing the best setups, refining your strategy, and managing your trades.
Our team has noticed that beginners often underestimate this benefit until they experience it firsthand. Once you’ve used a scanner to build your morning watchlist in 90 seconds instead of 90 minutes, there’s no going back.
Staying Focused on Your Trading Plan
Here’s a hard truth: The market is full of distractions. Stocks are making big moves every single day, and most of them have absolutely nothing to do with your strategy.
Without a scanner, you might get sucked into chasing whatever’s trending on social media or whatever’s flashing red on a random chart you happened to click. This is “shiny object syndrome,” and it’s a killer. You end up trading setups you don’t understand, in stocks you haven’t researched, all because you saw something move and got FOMO.
A scanner enforces discipline. When you define your criteria based on your trading plan, the scanner only shows you stocks that actually match your strategy. Everything else? Filtered out. Invisible. Not your problem.
It’s like putting blinders on a racehorse—you only see what’s relevant to your race.
Building a Pipeline of Trading Opportunities
Here’s the reality: On any given day, only about 5-10 stocks out of the entire market are truly “in play” for day traders. These are the stocks with the right combination of catalyst, volume, volatility, and technical setup to offer legitimate trading opportunities.
The challenge? Finding them before they move.
Scanners give you a constant pipeline of potential trades. As market conditions change throughout the day—a stock suddenly spikes in volume, breaks above a key level, or gaps up on news—your scanner alerts you immediately. You’re not waiting for someone to mention it in a chat room or stumbling across it by luck. You’re systematically identifying opportunities as they develop.
This is especially critical for day trading, where timing is everything. The difference between catching a breakout at the start versus jumping in late can mean the difference between a profitable trade and a loss.
Types of Stock Scanners You Should Know About
Not all scanners are created equal, and different types serve different purposes. Let’s break down the main categories so you know what you’re working with.
Technical Scanners (Most Common for Day Traders)
Technical scanners filter stocks based on price action, chart patterns, and technical indicator values. This is the bread and butter for most day traders.
You can scan for things like:
- Price action: Stocks breaking above resistance, making new highs, or showing reversal patterns
- Moving average criteria: Stocks trading above their 50-day or 200-day moving average
- Indicator values: RSI levels (overbought/oversold), MACD crossovers, Bollinger Band squeezes
- Chart patterns: Flags, triangles, head and shoulders (though pattern-recognition scanners can be hit-or-miss on accuracy)
For example, you might set up a scan to find: “All stocks above $20, trading above their 20-period moving average, with RSI between 50-70, on volume greater than 2x their average.”
Technical scanners are all about finding stocks where the chart setup matches what you trade. If you’re a breakout trader, you scan for breakouts. If you trade pullbacks to support, you scan for stocks pulling back to key levels.
Fundamental Scanners
Fundamental scanners filter based on a company’s financial metrics—things like earnings per share (EPS), price-to-earnings ratio (P/E), return on equity (ROE), debt levels, and profit margins.
These are more commonly used by swing traders and long-term investors who care about the underlying business fundamentals, but they can occasionally be useful for day traders too. For example, you might scan for stocks with recent earnings beats that are also showing strong volume and price momentum.
The reality? If you’re purely day trading based on technical setups, you probably won’t spend much time on fundamental scanners. But it’s good to know they exist.
Real-Time Intraday Scanners
This is where the magic happens for day traders.
Real-time intraday scanners monitor the market throughout the entire trading session and alert you the moment conditions change. Unlike end-of-day screeners that only update once the market closes, intraday scanners are constantly refreshing—often multiple times per second.
These scanners are critical for momentum trading, breakout setups, and any strategy that requires you to react quickly to live market action. Speed matters. If you’re scanning for stocks breaking to new highs, you need to know about it as it happens, not after the move is already over.
Most serious day traders run multiple intraday scans simultaneously, watching for different types of setups throughout the day.
Pre-Market and Post-Market Scanners
The market doesn’t stop when the closing bell rings. Stocks gap up and down in pre-market trading (before 9:30 AM ET) and continue moving in after-hours sessions.
Pre-market scanners are how professional day traders build their watchlists each morning. They scan for stocks that are gapping up or down significantly from the previous day’s close, usually with a catalyst like earnings, news, or sector momentum.
For instance, you might run a pre-market scan at 8:00 AM looking for: “Stocks up more than 5% with volume already over 100,000 shares and a price range between $5-$50.” This gives you a focused list of stocks to watch when the market opens.
Post-market scanners help you identify what happened after the close—which stocks reported earnings, which made big moves, and which might be setting up for tomorrow. This is part of your preparation and research workflow.
News Scanners
Here’s something a lot of beginners miss: The “why” behind a big move matters.
News scanners monitor various newsfeeds in real-time and alert you when specific companies or keywords you’re tracking get mentioned. The goal is to get a first-mover advantage—finding out about a catalyst before the rest of the market piles in.
For example, if a small-cap biotech announces FDA approval, you want to know about it immediately, not 10 minutes later when the stock has already spiked 30%.
News scanners are most effective when paired with data scanners. The data scanner shows you that a stock is moving; the news scanner tells you why. Understanding the catalyst helps you make better decisions about whether to trade the setup and how to manage risk.
Where to Find Stock Scanners (Free vs. Paid Options)
Good news: You often don’t need to look far or spend a fortune to start scanning.
Built Into Your Trading Platform
Most modern day trading platforms have built-in scanning tools. If you’ve already chosen a broker for paper trading, there’s a decent chance it includes some level of scanning functionality.
These broker-provided scanners are usually the easiest place to start because:
- They’re already integrated with your trading account
- They’re free (or included in your account fees)
- They use the same data feed you’re trading with
- You don’t need to learn a separate platform
The downside? Built-in broker scanners can be basic. They might have limited customization options, slower data speeds, or fewer pre-built scans. But for learning the fundamentals and practicing on a paper account, they’re more than adequate.
Check your platform’s features. You might be surprised what’s already available to you.
Standalone Scanning Software
If you outgrow your broker’s tools—or if you want more advanced features from the start—there are dedicated scanning platforms designed specifically for day trading.
Popular options include platforms like Trade Ideas, Scanz, Finviz, and TradingView. Some of these are free with limited features; others are paid subscriptions ranging from $30/month to $200+/month depending on data speed and customization depth.
The key is picking a scanner that fits your trading style. If you’re trading momentum breakouts on small-cap stocks, you need different features than someone swing trading large-cap value plays.
Don’t rush to buy expensive software right away. Start with what’s available, learn the basics, and upgrade only when you’ve identified specific limitations you need to overcome.
Web-Based vs. Desktop Scanners
Web-based scanners run in your browser. They’re convenient because you can access them from any device—your desktop, laptop, even a tablet. The computing power lives on the provider’s servers, so you’re not taxing your own machine.
The downside? You’re dependent on your internet connection, and web-based tools can sometimes be slower to update than desktop applications.
Desktop scanners are software installed directly on your computer. They typically offer faster data processing and more customization options, but they can be resource hogs. If you’re running a complex scan across thousands of stocks while also running charting software and your trading platform, you’ll need a reasonably powerful computer.
For beginners just starting with paper trading, web-based scanners are usually sufficient. As you scale up and start trading real money with multiple monitors and real-time execution, you might graduate to desktop applications.
Common Stock Scanner Criteria for Beginners (Start Simple!)
When you’re setting up your first scans, the temptation is to create something super complex with 15 different filters because more filters = more precise, right?
Wrong.
Start simple. Really simple. Two to three criteria is plenty when you’re learning. Here are the most common—and most useful—filters for beginners.
Volume and Liquidity Filters
This is arguably the most important filter for day traders, and it’s one our team hammers home constantly.
Volume and liquidity matter because they determine how easily you can get in and out of a trade. A stock might show a beautiful chart pattern, but if it’s only trading 50,000 shares a day, you’re going to have trouble executing your orders without moving the price against yourself.
For day trading, you generally want to filter for stocks with:
- Minimum daily volume: At least 500,000 shares traded per day (many traders prefer 1 million+)
- Relative volume: Volume compared to its average—for example, “at least 1.5x average volume” ensures the stock is seeing unusual activity today
A common beginner scan might be: “Show me stocks with average daily volume above 1 million shares and current volume already above 200,000 shares before 10:00 AM.”
High volume = tighter spreads, easier execution, and less slippage. Don’t skip this filter.
Price Range Criteria
Price range filters help you avoid stocks that are either too expensive or too risky for your account size.
For example:
- Minimum price: Filtering out stocks below $5 or $10 helps you avoid ultra-low-priced penny stocks, which can be extremely volatile and sometimes difficult to trade
- Maximum price: If you’re trading with a small account, you might want to avoid stocks over $100 or $200 because position sizing gets tricky
A typical beginner filter might be: “Stocks priced between $10 and $50.”
This sweet spot gives you access to established companies with decent liquidity while keeping the per-share price manageable for smaller accounts. As your account grows and your strategy evolves, you can adjust these ranges.
Percentage Change Filters
Want to find momentum? Scan for stocks making big moves.
Percentage change filters show you stocks that are up or down by a specific amount from the previous close (or from the open). This is how you find the action quickly.
Examples:
- Gap up scan: “Stocks up more than 3% from yesterday’s close”
- Momentum scan: “Stocks up more than 5% since today’s open”
- Reversal scan: “Stocks down more than 8% that are now recovering”
The exact threshold depends on your strategy and market conditions. In a choppy market, a 3% move might be significant. In a volatile market, you might need to scan for 5-7% moves to find the real momentum plays.
One tip from our team: Don’t just scan for gainers. Some of the best opportunities come from stocks that drop hard and then bounce—or from short setups on stocks that gap up and fail.
Technical Indicator Criteria
Once you’re comfortable with basic filters, you can layer in technical indicators to refine your scans further.
Common examples:
- Moving averages: “Stocks trading above their 20-day and 50-day moving average” (indicates uptrend strength)
- New highs/lows: “Stocks making a new 52-week high” or “Stocks hitting a new intraday high”
- RSI levels: “Stocks with RSI between 60-80” (showing momentum but not yet overbought)
- Support/resistance: “Stocks within 2% of a major support level”
You can also scan for basic chart patterns—although be aware that automated pattern recognition can be hit-or-miss. A scanner might identify a “flag pattern,” but you’ll still need to confirm it visually.
The key here is to match your scan criteria to the setups you actually trade. If you’re a breakout trader, scan for stocks approaching resistance. If you trade pullbacks, scan for stocks pulling back to moving averages or support zones.
How to Build Your First Stock Scan (The 4-Step Process)
Creating an effective scan isn’t about randomly throwing filters together. There’s a logical process—and when you follow it, your scan results actually help you instead of overwhelming you.
Step 1: Define What You’re Looking For
Before you touch any scanner settings, answer this question: What trading opportunity am I hunting for?
You need to be specific. “Good opportunities” or “stocks that might go up” isn’t good enough. Your scanner can’t read your mind.
Instead, think in terms of your trading plan:
- Are you looking for momentum breakouts above resistance?
- Are you hunting for pullbacks to moving averages in established uptrends?
- Do you want stocks gapping up on earnings with strong volume?
- Are you looking for reversal setups on oversold stocks?
The setup you’re searching for should already be defined in your trading plan. If it’s not, that’s a problem you need to fix before you start scanning.
Example: “I’m looking for small-cap stocks (under $20) that are gapping up at least 5% in pre-market with strong volume, because I trade momentum breakouts after the open.”
Step 2: Translate Your Setup Into Quantifiable Criteria
Now comes the translation work. You need to turn your setup description into specific numbers and parameters that a scanner can understand.
You can’t tell a scanner to find “stocks making big moves.” You have to define what “big” means mathematically.
Let’s use the example from Step 1 and translate it:
- “Small-cap stocks under $20” → Price filter: $5 minimum, $20 maximum
- “Gapping up at least 5%” → Percentage change filter: +5% or greater from previous close
- “Strong volume” → Volume filter: Relative volume > 2.0 (meaning twice the average volume)
Another example: If you want to find stocks “pulling back to support in an uptrend,” you might translate that as:
- Price above 50-day moving average (confirms uptrend)
- Price currently within 5% of 20-day moving average (confirms pullback)
- Volume above 500,000 shares (ensures liquidity)
The goal is precision. Vague concepts must become concrete numbers.
Step 3: Configure Your Scanner Settings
Now you actually input your criteria into the scanner.
Choose your parameters carefully:
- Timeframe matters: Are you scanning based on 5-minute charts, 1-hour charts, or daily charts? Match the timeframe to your trading style
- Start with fewer filters: Resist the urge to add 10 different criteria right away. Start with 2-3 core filters
- Save your scans: Most platforms let you save scan configurations so you can re-run them quickly each day
Here’s what a simple beginner scan might look like in practice:
Pre-Market Gap Scan:
- Price: $10 – $50
- % Change from previous close: +4% or higher
- Average daily volume: > 1,000,000 shares
- Current pre-market volume: > 100,000 shares
That’s it. Four filters. Clean, simple, and effective for finding momentum setups.
Step 4: Test, Analyze, and Refine
This is the step most beginners skip—and it’s why their scans suck.
After you build a scan and run it, you need to manually review the results:
- Pull up the charts for the stocks that appeared
- Ask yourself: “Does this actually match what I’m looking for?”
- Track false positives: stocks that met your criteria but aren’t actually tradeable
Let’s say your scan returns 50 stocks, but when you actually look at the charts, only 10 of them show setups you’d consider trading. That’s a signal to tighten your criteria.
Maybe you need to:
- Raise the volume threshold to eliminate low-liquidity junk
- Narrow the price range
- Add a filter for stocks above a key moving average
- Increase the percentage change requirement
The goal isn’t to get 100 results. The goal is to get quality results. We’d rather see a scan that returns 5 perfect candidates than one that returns 50 mediocre ones.
Keep a journal of which scan configurations produce your best trades. Refine constantly. Your scans should evolve as your strategy and understanding deepen.
Using Stock Scanners the Right Way (Critical Rules for Beginners)
Here’s where we need to have a serious talk, because this is where most beginners screw up.
Stock scanners are incredibly powerful tools. But like any powerful tool, they can be dangerous in the wrong hands.
Rule #1: Scanners Generate Ideas, NOT Buy Signals
Let’s be absolutely clear about this: A stock appearing on your scan is not a trade signal.
The scanner just filtered the market down to a manageable list of stocks that meet your basic criteria. That’s it. It’s a starting point, not a finish line.
You still need to:
- Pull up the chart and analyze the actual setup
- Confirm the pattern matches what you’re looking for
- Identify your specific entry point, stop-loss level, and profit target
- Calculate your risk/reward ratio
- Verify there’s a legitimate catalyst or reason for the move
Think of the scanner as a metal detector on a beach. It beeps when it finds metal—that’s helpful. But you still have to dig, see what it actually is, and decide if it’s treasure worth keeping or just another bottle cap.
The scanner points you in the right direction. Your analysis determines whether you take the trade.
Rule #2: Quality Over Quantity (Always)
This might be the most important lesson our team has learned about scanning: Getting 100 results doesn’t help you.
In fact, it hurts you.
When your scan returns 75 stocks, what happens? You get overwhelmed. You can’t possibly analyze all of them before the market opens. You start clicking through charts frantically, making rushed decisions, and ultimately either missing the best setups or forcing trades you shouldn’t take.
The key is to tighten your criteria until your scan returns a focused, manageable watchlist. For most day traders, that’s somewhere between 5-15 stocks.
Quality beats quantity every single time. Would you rather have 10 A+ setups that perfectly match your strategy, or 80 random stocks you have to sift through hoping to find something good?
If your scan is returning too many results, add more filters. Raise the volume requirement. Narrow the price range. Increase the percentage change threshold. Get selective.
Rule #3: Your Trading Plan is Still Boss
The scanner doesn’t replace your trading plan—it serves your trading plan.
Every criterion you set in your scanner should tie directly back to the rules you defined in your plan. If your plan says you only trade stocks above their 50-day moving average, then that’s a filter in your scan. If your plan says you need at least 1 million shares in average daily volume, that’s in your scan too.
And even after the scan gives you results, you still need to follow every other rule in your plan:
- Entry rules: Where exactly do you enter? On a breakout? On a pullback to support? Your plan defines this
- Stop-loss placement: The scan doesn’t tell you where to put your stop—your risk management rules do
- Position sizing: You still need to calculate how many shares to buy based on your 1-2% risk rule
The scanner finds candidates. Your plan governs every decision after that.
Rule #4: Build Watchlists from Your Scan Results
Here’s a workflow tip that will save you a lot of pain: Don’t trade directly from your scanner.
Instead, use your scan results to build a focused watchlist, then do your deeper analysis on that watchlist.
For example:
- Run your pre-market gap scan at 8:00 AM
- Review the results and add the best candidates to a watchlist
- Chart each stock on your watchlist, mark key levels, and plan potential trades
- Monitor your watchlist when the market opens for actual entry signals
This two-step process—scan first, then curate—prevents you from impulsively jumping on the first stock that pops up on your scan without doing proper analysis.
Professional traders treat their morning watchlist like a battle plan. They know exactly which stocks they’re watching, what they’re waiting for, and how they’ll react when conditions develop.
Real-World Scanner Workflow: How Professional Traders Actually Use Scanners
Theory is great, but let’s talk about what this actually looks like in practice. Here’s how our team—and most professional day traders—structure their scanning routine.
The Pre-Market Routine (Before 9:30 AM)
This is where your day actually starts. The work you do before the opening bell often determines whether you have a profitable day or a frustrating one.
Around 7:30-8:00 AM:
- Run your gap scanner to find stocks that moved significantly overnight
- Look for stocks gapping up or down at least 3-5% with a clear catalyst (earnings, news, sector momentum)
- Check pre-market volume—you want stocks that are already active
8:00-9:00 AM:
- Review your scan results and narrow them down to your top 5-10 candidates
- Pull up charts for each stock and mark key levels: yesterday’s high/low, major support/resistance, moving averages
- Research the catalyst: Why is it moving? Is it an earnings beat? FDA approval? Sector rotation?
- Plan potential trade scenarios: “If it breaks above this level with volume, I’ll enter. If it fails here, I’ll consider a short.”
9:00-9:30 AM:
- Watch how your watchlist stocks are trading in the final pre-market minutes
- Adjust your plan if needed based on changing price action
- Get mentally prepared for the open—this is go-time
By the time the opening bell rings, you should have a clear, focused watchlist with specific stocks you’re monitoring and specific conditions you’re waiting for.
Intraday Monitoring (During Market Hours)
Your scanning doesn’t stop when the market opens—it shifts to real-time monitoring.
First 30 minutes (9:30-10:00 AM):
- This is typically the highest-volume period of the day
- Watch your pre-market watchlist for breakouts, breakdowns, or failed moves
- Run a “high-of-day momentum scan” to catch stocks surging after the open that weren’t on your pre-market radar
Mid-day (10:30 AM – 3:00 PM):
- Set up alerts for specific conditions on your watchlist stocks
- Run periodic scans for new setups: stocks breaking out, stocks pulling back to support, unusual volume spikes
- Don’t just stare at your screen—let your scanner do the watching and alert you when something important happens
Power hour (3:00-4:00 PM):
- Another high-volume period as institutions position for the close
- Scan for late-day momentum or potential overnight holds (if that’s part of your strategy)
The key is balance: You want to stay aware of new opportunities without getting distracted from managing your active trades.
Post-Market Review (After 4:00 PM)
This isn’t about finding today’s trades—it’s about preparing for tomorrow.
After the close:
- Review which of your scan results led to actual trades
- Ask yourself: “Which scans produced the best setups? Which produced junk?”
- Adjust your scan criteria if needed
- Run a post-market scan to see which stocks reported earnings or had major news—these might be tomorrow’s watchlist
The traders who consistently profit from scanning aren’t just running random scans—they have a systematic, repeatable process that they follow every single day.
Common Stock Scanner Mistakes Beginners Make
We’ve taught hundreds of beginners how to use scanners, and we see the same mistakes over and over again. Let’s address them head-on so you can avoid the pain.
Information Overload (The Double-Edged Sword)
Here’s the thing about scanners: They’re so good at finding stocks that they can actually hurt you.
Without discipline, you’ll end up running 10 different scans simultaneously, getting alerts every 30 seconds, and trying to watch 50 stocks at once while the market is open. This is information overload, and it leads to paralysis.
You get so overwhelmed analyzing endless possibilities that you either:
- Miss the actual good trades because you’re distracted
- Force a trade just to “do something” because you feel pressured
- Jump between setups without committing to any of them
The fix? Extreme selectivity. Run fewer scans. Watch fewer stocks. Go deep on a small watchlist rather than shallow on a massive one.
Remember: Trading is about quality, not quantity. One well-executed trade on a perfect setup is better than ten mediocre trades on random stocks your scanner spit out.
Treating Alerts as Trade Signals
This is the biggest trap, and we’ve already mentioned it, but it’s worth repeating because it’s so common.
Your scanner alerts you that a stock just broke above its high-of-day with increasing volume. Your heart races. You see the green candles. You immediately hit buy without checking:
- Is there resistance right above here?
- What’s the broader market context?
- Is there actually a catalyst, or is this just noise?
- Where would your stop go?
- What’s the risk/reward?
This is the “scanner said buy” trap, and it’s a fast way to lose money.
Scanners identify potential setups. They do not tell you when to enter, where to exit, or how much to risk. Those decisions require analysis and judgment.
The professional approach: When you get an alert, treat it as a notification to investigate, not as a trade signal.
Ignoring Your Trading Methodology
Here’s a scenario we see constantly: A beginner builds a trading plan that says they only trade pullbacks to support in established uptrends. Solid strategy.
But then they set up a scanner and start getting alerts for breakout stocks, momentum reversals, and gap-and-go plays. None of these match their plan, but the alerts are so exciting—stocks are moving, money is being made right now—that they start taking trades outside their strategy.
This is scanner-induced FOMO, and it’s deadly.
The scanner is a tool. It should serve your methodology, not replace it. If your plan says you only trade one specific setup, then your scanner should only look for that setup. Period.
Discipline still matters. Actually, discipline matters more when you have powerful tools, because the temptation to misuse them is greater.
Stock Scanner Best Practices for Day Traders
Let’s wrap up with some practical, actionable advice from our team’s experience.
Set up intraday alerts (even if you’re not actively day trading yet). Why? Because it teaches you to recognize patterns in real-time and helps you understand how quickly conditions can change in the market. Practice monitoring alerts in your paper trading account.
Save your successful scan configurations. When you find a scan that consistently produces good setups, save it. Name it something descriptive like “Pre-Market Gap Scan” or “Pullback to 20MA.” Over time, you’ll build a library of proven scans you can run with one click.
Track which scans produce your best trades. Keep notes in your trading journal: Which scan did this trade come from? Did it produce other good setups today? This helps you identify which scanning strategies work best for your style.
Don’t spread yourself too thin across multiple scans. Two or three well-designed scans that match your strategy are better than 15 random scans that overwhelm you.
Review and adjust criteria regularly. Market conditions change. Volatility ebbs and flows. A scan that worked great in January might produce garbage in July. Stay flexible and refine your criteria based on what’s currently working.
Use timeframes that match your trading style. If you’re a scalper taking trades that last 5-15 minutes, you need scans based on 1-minute or 5-minute charts. If you’re holding for hours, daily or hourly timeframes make more sense.
Verify volume before you trade. Just because a stock appears on your scan doesn’t mean it’s actually liquid enough to trade profitably. Always double-check current volume before entering.
Understand the catalyst. Price movement without a reason is often just noise. When your scanner flags a stock, ask “Why is this moving?” News? Earnings? Sector momentum? Random spike? The “why” matters.
Frequently Asked Questions About Stock Scanners
What is a stock scanner and how does it work?
Quick Answer: A stock scanner is software that filters thousands of stocks based on your predefined criteria and shows you only the ones that match.
A stock scanner continuously monitors market data—prices, volume, technical indicators, news—and automatically identifies stocks that meet the specific conditions you’ve set. For example, if you tell it to find “stocks up more than 5% today with volume over 1 million shares,” it will scan every stock in the market and give you a filtered list of only those that match. Think of it as a highly specialized search engine for trading opportunities. The scanner does in seconds what would take you hours to do manually, freeing you up to focus on analyzing the best opportunities and executing trades.
Key Takeaway: Scanners automate the tedious work of filtering the market so you can spend your time on higher-value activities like analysis and trade execution.
Do you need a stock scanner for day trading?
Quick Answer: You don’t technically “need” one, but you’re at a massive disadvantage without it.
Could you day trade without a scanner? Sure—just like you could technically do accounting with a pencil and paper instead of a spreadsheet. But why would you? With over 6,000 stocks moving every day, manually finding trading opportunities is inefficient and ineffective. Scanners level the playing field by giving you the same powerful filtering capabilities that professional traders use. Before scanners existed, traders spent 3-4 hours each morning building watchlists manually. Now you can do it in under a minute. For day trading specifically, where speed and timing are critical, a scanner isn’t optional—it’s essential infrastructure.
Key Takeaway: While technically optional, scanners are practically essential for competitive day trading in modern markets.
What’s the difference between a stock scanner and screener?
Quick Answer: Scanners provide real-time data for active trading; screeners use end-of-day data for longer-term analysis.
The technical distinction comes down to speed and data freshness. Stock screeners were developed earlier and typically use end-of-day data—you run a screen once the market closes and get a static list to review for longer-term investment ideas. Stock scanners, on the other hand, connect to real-time data feeds and continuously monitor the market throughout the day, alerting you the moment conditions change. For day traders who need to react quickly to intraday price movements, scanners with live data are critical. That said, many modern platforms blur these lines and offer both functionalities under one tool. The important thing isn’t the terminology—it’s understanding that real-time data matters for active trading.
Key Takeaway: If you’re day trading, you want a scanner with real-time data; if you’re long-term investing, end-of-day screeners work fine.
What are the best stock scanners for beginners?
Quick Answer: Start with the free scanner built into your broker’s trading platform.
Most modern brokers include basic scanning functionality in their platforms, and for beginners just learning the fundamentals, these built-in tools are usually sufficient. They’re free (or included in your account), integrated with your trading platform, and good enough to practice with on a paper trading account. As you develop your skills and start live trading, you might eventually upgrade to dedicated scanning software like Trade Ideas, Scanz, Finviz, or TradingView—but there’s no need to spend money on premium scanners until you’ve outgrown what your broker provides. Focus on learning how to use scanning effectively rather than chasing the fanciest tools.
Key Takeaway: Don’t spend money on premium scanners until you’ve maxed out the free tools already available to you.
How do you set up a stock scanner for day trading?
Quick Answer: Define what you’re looking for, translate it into numbers, input the criteria, then test and refine.
Setting up an effective scan follows a four-step process: First, define the specific trading opportunity you’re hunting for (momentum breakouts, pullbacks to support, etc.). Second, translate that setup into quantifiable criteria the scanner can understand—you can’t scan for “good stocks,” but you can scan for “stocks up >5% with volume >2x average.” Third, input your criteria into the scanner with appropriate timeframes that match your trading style. Fourth, run the scan, review the results, and refine your criteria until you’re getting quality matches, not just quantity. Start with just 2-3 simple filters like volume, price range, and percentage change. You can always add complexity later once you understand the basics.
Key Takeaway: Start simple with basic criteria tied to your trading plan, then refine based on the quality of results you get.
What criteria should I use in a stock scanner?
Quick Answer: Start with volume, price range, and percentage change—then add technical filters that match your strategy.
The three most important beginner-friendly criteria are: (1) Volume filters to ensure liquidity (minimum 500K-1M shares daily), (2) Price range filters to match your account size (often $10-$50 for beginners), and (3) Percentage change filters to find momentum (stocks up or down 3-5% or more). From there, you can layer in technical criteria that align with your specific strategy—moving averages if you trade trends, RSI levels if you use momentum indicators, new highs if you trade breakouts. The key is matching your scan criteria directly to the setups defined in your trading plan. Don’t add filters just because they exist; add them because they help you find the specific patterns you actually trade.
Key Takeaway: Focus on volume, price range, and percentage change first, then add strategy-specific technical criteria.
Can you make money using stock scanners?
Quick Answer: Scanners help you find opportunities, but they don’t guarantee profits—your execution and discipline determine whether you make money.
Stock scanners are tools that improve efficiency and help you find tradeable setups faster, but they don’t make trading decisions for you. Plenty of profitable traders use scanners, and plenty of losing traders use the exact same scanners—the difference is in how you analyze the results, manage risk, and execute trades. Scanners give you a fishing rod and point you to where the fish are; actually catching the fish still requires skill. If you have a solid trading strategy, good risk management, and the discipline to follow your plan, scanners can absolutely help you make money by ensuring you never miss high-probability setups. But if you lack those fundamentals, a scanner will just help you lose money faster by giving you more bad trades to take.
Key Takeaway: Scanners are enablers, not magic money machines—they amplify your trading ability, whether good or bad.
Are free stock scanners good enough?
Quick Answer: Yes, especially for beginners—free scanners are more than adequate for learning and even for profitable trading.
Many free scanners (like those built into broker platforms, Finviz, TradingView’s basic tier, and Yahoo Finance) offer solid functionality that’s perfectly sufficient for most traders. The main limitations of free tools are typically slower data speeds (delayed quotes instead of real-time), fewer customization options, and limited save functionality. For paper trading and learning, these limitations don’t matter much. Even for live trading, plenty of traders use free scanners profitably—it’s about your strategy and execution, not having the fanciest tools. That said, if you’re actively day trading with real money and need real-time alerts with complex custom scans, paid scanners eventually become worth the investment. Start free, and upgrade only when you’ve identified specific limitations holding you back.
Key Takeaway: Free scanners work great for learning and can work well for live trading too—upgrade only when you’ve outgrown them.
What volume should I scan for in day trading?
Quick Answer: Minimum 500,000 shares in average daily volume, with many traders preferring 1 million+ shares.
Volume is critical for day trading because it determines how easily you can enter and exit positions without impacting the price. Low-volume stocks have wider bid-ask spreads, more slippage, and can be difficult to sell when you need to exit quickly. As a general guideline, scan for stocks with at least 500,000 shares in average daily volume, though 1 million or more is safer. Additionally, look for relative volume—stocks trading at least 1.5-2x their normal volume—to ensure there’s unusual activity happening today specifically. High volume today on a normally low-volume stock can work, but it’s riskier. The more volume, the better your execution will be.
Key Takeaway: Prioritize stocks with 500K-1M+ average daily volume to ensure you can enter and exit trades smoothly.
How do professional traders use stock scanners?
Quick Answer: They run pre-market scans to build focused watchlists, monitor real-time alerts during the day, and refine criteria constantly.
Professional day traders typically follow a systematic routine: Before market open (7:30-9:00 AM), they run gap scanners to identify stocks that moved overnight and build a focused watchlist of 5-15 stocks with planned trade scenarios. During market hours, they monitor that watchlist and use real-time scanners to alert them when new opportunities develop. After the close, they review which scans produced the best trades and adjust criteria for tomorrow. The key difference between professionals and beginners is discipline—pros don’t chase every alert or watch 50 stocks. They stay extremely selective, focusing on quality setups that match their proven strategies. They also track which scan configurations work best and continuously refine their approach.
Key Takeaway: Professionals use scanners systematically as part of a repeatable daily routine, not randomly or impulsively.
Can stock scanners predict stock movements?
Quick Answer: No—scanners identify current conditions, they don’t predict the future.
Stock scanners filter stocks based on what’s happening right now or what happened recently. They might find a stock breaking above resistance with increasing volume, but they can’t tell you whether that breakout will continue or fail. Scanners provide data; you provide the analysis and predictions. Think of it this way: A scanner might identify that a stock is “hot” because it’s up 8% on heavy volume, but whether you should buy it, short it, or ignore it depends on your interpretation of the chart, the catalyst, the market context, and your strategy. Scanners are discovery tools, not crystal balls.
Key Takeaway: Scanners help you find opportunities based on current conditions; predicting what happens next is still your job.
How many stocks should a scanner return?
Quick Answer: Aim for 5-15 stocks—quality over quantity always wins.
If your scan is returning 50+ stocks, you’re being too broad and you’ll get overwhelmed trying to analyze them all. If it’s returning zero stocks, you’re being too restrictive. The sweet spot for most day traders is somewhere between 5-15 stocks—a focused, manageable watchlist you can actually research thoroughly before and during market hours. You want enough options to find good trades, but not so many that you can’t give each one proper attention. Quality beats quantity every time. It’s better to deeply understand 10 great setups than to skim through 75 mediocre ones. If you’re consistently getting too many results, tighten your criteria—raise volume requirements, narrow price ranges, increase percentage thresholds. Get selective.
Key Takeaway: Target 5-15 quality results by tightening criteria until you have a focused, manageable watchlist.
Your Next Steps: Start Scanning Smarter
Alright, you’ve made it through the complete guide. You understand what stock scanners are, why they’re essential, the different types available, and—most importantly—how to use them without falling into the common traps that destroy beginner traders.
Here’s what to do next:
1. Explore your platform’s scanner. Go into your paper trading platform right now and find the scanning functionality. It’s probably hiding in a menu somewhere. Click around. See what pre-built scans are available. Get familiar with the interface.
2. Build ONE simple scan based on your trading plan. Not five scans. Not ten. One. Use the criteria we discussed: volume, price range, and percentage change. Keep it simple. Run it tomorrow morning before the market opens.
3. Review the results critically. When your scan gives you a list of stocks, pull up each chart and ask: “Does this actually match what I’m looking for?” Track which results are high-quality setups versus false positives.
4. Refine and repeat. Adjust your criteria based on what you learn. Over time, you’ll develop scans that consistently find the exact setups you trade best.
5. Practice in your paper account. Use your scanner to build watchlists and execute simulated trades before risking real money. Treat your paper trading seriously—this is where you develop the habits and workflows you’ll use when money is on the line.
Remember: Scanners are powerful tools that can dramatically improve your efficiency and help you find opportunities you’d otherwise miss. But they’re tools that serve your strategy, not a replacement for strategy.
Keep it simple. Stay disciplined. Focus on quality over quantity.
And speaking of discipline and staying focused, let’s address the elephant in the room: You now have a trading plan, you know how to find stocks that match your setups, and you understand risk management. You have all the technical knowledge you need to trade.
So why is trading still so hard?
Because the biggest challenge in trading isn’t the charts, the rules, or the tools—it’s the complex computer between your ears. It’s your own mind working against you.
That’s exactly what we’re tackling next. In our next guide, we’re diving deep into trading psychology, starting with the two biggest emotional demons every trader faces: fear and greed. We’ll explore how these emotions manifest (FOMO, hesitation, revenge trading), why they’re so powerful, and most importantly, the practical strategies our team uses to manage them.
Because all the scanners in the world won’t help you if you can’t control the impulse to chase a stock that’s already moved, or the fear that prevents you from taking a perfect setup.
Ready to confront the real battle? Let’s go.
Article Sources
The information in this guide was built from research and verification using the following high-authority sources:
- Investing.com – “What Is a Stock Screener?”
Comprehensive educational resource on stock screening tools, scanner vs. screener distinctions, and practical applications for traders and investors.
https://www.investing.com/academy/stocks/what-is-a-stock-screener/ - SimFin – “Understanding Stock Scanners: Boost Your Real-Time Trading”
Expert analysis on real-time stock scanners, their use in active trading, and the critical differences between scanners and screeners for day traders.
https://www.simfin.com/en/glossary/s/stock-scanner/ - Centerpoint Securities – “Stock Scanners: The Complete Guide for Active Traders”
Professional trading firm’s educational guide covering the 4-step scan building process, common pitfalls, and the importance of quality over quantity in scan results.
https://centerpointsecurities.com/stock-scanners/ - FINRA – “Regulatory Notice 24-13: Retrospective Rule Review – Day Trading”
Official regulatory context on day trading requirements, pattern day trader rules, and the evolution of risk management technology in modern markets.
https://www.finra.org/rules-guidance/notices/24-13 - Scanz – “How to Use a Stock Screener Like a Professional Trader”
Technical implementation guide for stock screening, best practices for building effective scans, and tips for avoiding common beginner mistakes.
https://scanz.com/how-to-use-a-stock-screener/ - StocksToTrade – “How to Use Stock Scanners: A Beginner’s Guide”
Practical guide to scanner types, time-saving benefits, and real-world applications for active traders.
https://stockstotrade.com/how-to-use-stock-scanners/
