For a trader who plays trade in stocks, there are aware that the most important tool in their arsenal is a volatile stock screener. Their utility is that it filters among a wide database of stocks to a manageable level. In the market there are lot of paid along with free stock screeners which have variety of features once you undertake research online. A stock screener saves time or effort and enables you to make hidden decisions on the stock front.

The professional managers misinterpret the broad market. A majority of mutual fund managers go on to underperform in the short or long run. A lot of reasons can be attributed on why investors go on to underperform in trading market; the main reason of course is human nature. A successful investor has to have a sense of discipline. An investment decision should have some basic facts or logic behind it. But sadly a host of variables are included as part of an investment process.

To develop a mechanical model of stock screening does involve a lot of work. But the work is really worth the benefit as there are numerous benefits. For an investor it helps them to allocate an identical stock selection procedure. It is time after time where the focus is on variables when they are going to sell or buy a stock. It replicates discipline at its best.

Once you go on to design a stock trading model this means that all variables have been chosen. Here you can opt for an inexpensive stock screener as they are plenty of free tools available on the internet. For an investor it becomes easy to classify which stocks meet their criteria with a single click of a mouse. This is an efficient process rather than digesting each and every process of information that comes in your way. It would be beyond saying that stock screener analysis thousands of stocks within a fraction of a second. Even in weeks it would be really difficult for a researcher in order to accomplish this task.

In mechanical investing you develop a model where you can make investment decisions. In some ways it could sound imprudent. Now how a model can be aware that it is the best? Any model would be as smart as the researcher has gone on to work on it. The research has to build a model in such a way where all variables are taken into consideration that would aid in an investment decision making process.

An example is if an investor wants to incorporate a stock screening model, then all variables should be included as part of the model that would have considerable impact on future stock prices. Figuring out which models are to be included is not an easy task at all. It would require a lot of historical testing to arrive at a decision. In an ideal situation a model of stock screening should go on to include various models that have been part of historical testing

Saves time

A stock screener filters a wide database of stocks as per specific criteria sets. For a trader considering technical analysis this is a valuable tool as filtering on a given set of data is illustrated. To gain information about undervalued stocks you can observe stocks to a price per earnings ratio within a given budget. With a stock screener you can figure out reports on a year by year growth basis. In sorting out among all such information to trade would be a cumbersome task for a novice trader. For this reason this tool is a valuable one for stock and swing traders.

Eradication of biases or emotions

Investors are known to invest money in stocks which provide consistent rate of returns. When a market changes this could pave way for unwise market decisions. The behavioural biases could be really difficult to remove if you are exposed to companies and think that it is a worthy investment. Just because a place is safe to shop it does not mean that it is a safe bet for investment. The main benefit of a stock screener would be to evaluate all the stocks in the given screener. They limit their screening operation to a specific set of stocks rather than considering all of them. If you remove emotional biases against stocks it would enable you to discover hidden gems.

Look out for new invest opportunities

With a stock screener it would enable you to narrow down your stock search options and you can choose one as per your criteria. There are going to be stocks in your list about which you know nothing. Stocks less familiar can be undervalued or overlooked at the same time. A stock screener would bring such companies to the fore and investors are on the ground floor in terms of earning potential. Choosing a stock with a stock screener involves various factors into consideration.

For a day trader they are going to need a stock screener that would provide real time updates as per swings of the market. For a swing trader this is not going to be the case as they are not going to trader for weeks or even months. There are free along with paid stock screeners and you can go on try as per your needs.

To conclude investors prefer a choice to actively manage their investment portfolio and rather than using models is aware on which are the stocks to use. Now the question that needs to be asked is if the process appears to be so good, then why is the reason on why so many investors underperform in the market.

The model of stock screener works as it forces an investor to buy and sell stocks where no emotion is involved and with a definite sense of discipline. The focus is on components that do matter a lot where every single time the same process of selection is being used.