Executing Custom Screeners: A Comprehensive Guide

Conquer the stock market with advanced stock screeners

Last updated: Jan 30, 2024

Author: Nathan Nobert

Custom Stock Screeners

Stock screeners are tools that allow you to filter through thousands of stocks to find the ones that match your criteria. They are used by traders and investors to find stocks that are worth investing in. There are many different types of stock screeners, but they all have one thing in common: when used correctly, you can make money!

Key Takeaways

- Introduction to custom stock screeners
- Building a custom screener
- Executing a custom screener
- Viewing results and taking action
- Backtesting our strategy

Introduction to Custom Stock Screeners

Understanding The Power of Custom Stock Screeners

Stock screeners are tools that can save you time and money. They allow you to filter through thousands of stocks to find the ones that match your criteria. This is especially useful for traders who are looking for stocks that are worth investing in. You can read more about why stock screeners are great investment tools here.

Finding a screener that allows customization is important because it allows you to find stocks that match your specific and unique criteria. Further steps can be taken in backtesting to ensure that your criteria is profitable.

Why Prosperse Scanner Stands Out

At Prosperse, our specialty is custom and automated stock screening. We have built a powerful scanner builder that allows you to build custom scanners with our no-code strategy builder. You can scan for any technical or fundamental condition you can think of. We are constantly making improvements by adding more indicators and features to our scanner builder.

We believe starting out with stock screeners can be intimidating for new traders. That's why we have created some base templates that can be used to simplify this process. In this guide, we will be creating our screener from scratch and adding all of the criteria to customize our scanner.

If you would like to follow along with this guide, you can either login to your account, or register for an account.

Building A Customer Screener

Firstly, navigate to the Scanners page from the sidebar once you are logged into your account in Prosperse. If you don't already have any scanners, you will be prompted to create one, or you can click the "new" button near the top left.

For this scanner, we will target the following conditions on the daily charts:

- The second last candle is a Bullish Engulfing candle
- The second last last candles close price is less than the SMA20 (Simple Moving Average 20)
- The 4rd latest candle (3 candles ago from last), is a red candle

In summary, this scanner will identify stocks that have had a bullish engulfing candle, and the close price of that candle is less than the SMA20. The 3rd latest candle must also be red. This is a fairly simple indication of a downtrend that might be turning around due to the bullish engulfing candle.

The reason I'm also choosing to put my conditions back a day is because I want to make sure that the bullish engulfing candle is confirmed. If I were to use the latest candle, it would be possible that the bullish engulfing candle is not confirmed yet. This is a way to prevent false breakouts and triggers.

Here is our fully completed scanner, with all of the options and conditions added:

We will save this - which adds our scanner to our list of saved scanners. Here you will see our newest scanner at the bottom of my list of scanners

Executing a Custom Screener

Now, we can hit the play button from the list of buttons on the right side of the scanner, which looks like this: . This will execute the scanner and display the results. As you can see, we receive a popup stating that the scanner has found 123 results.

We can click on the "Execution Results" tab to view all of our results in a list. You can flip back between these tabs to make changes to your scanners, and execute them as many times as you want.

Viewing the list of results from our Bullish SMA Scanner

Viewing Scan Results and Validation

Next, we will validate our scan results by clicking the chart button. This will open the selected ticker in a new tab in the full screen chart view.

The goal of this step is to validate that our scanner is doing what we expect it to do. We can see this in the below chart, which displays the 20SMA in blue, and the 3rd latest candle in red. The second last candle is the bullish engulfing candle, which is green.

Viewing the chart for a result of our Bullish SMA scanner

Backtesting our Strategy

We can take this process another step further and validate our entire strategy! This is through back-testing, and we can easily leverage Prosperse to conveniently do this.

From the scanner list view, you can click the back-testing button, the vials:

This button will send your scanner, alongside all of its details to our custom back-tester. It will open the back-tester in a new tab, which is great because we can make tweaks to our scanner and run our back-test after each change.

Before we can run the back-tester, we do have to set a couple options to ensure our results will work as we expect.

Firstly, we will set the "Take Profit %", and "Stop Loss %". These are values that tell our back-tester when it should automatically exit positions if we don't have a closure condition set, or the maximum candles has not been hit yet.

Next, we will need to select some tickers, or an entire sector. When we created our scanner, we did not specify any tickers, so it scanned the entire market. This is great for most cases, however when backtesting we want to be a little bit more specific. We have chosen the following index funds as our tickers:

- US:IEMG - iShares Core MSCI Emerging Markets ETF
- US:IWN - iShares Russell 2000 Value ETF
- US:QQQ - Invesco QQQ Trust Series 1
- US:SPY - SPDR S&P 500 ETF Trust
- US:TQQQ - ProShares UltraPro QQQ
- US:VOO - Vanguard S&P 500 ETF
- US:VTI - Vanguard Total Stock Market ETF

There was no specific reason these index funds were chosen, I had just googled some top index funds and selected those tickers. I feel this is a good way to cover a wide spread of the market, without over-saturating our results. Feel free to play around with the back-tester to find what works best for you.

Now we can click "Run", and view our results on the ride side - as demonstrated by the below picture.

As you can see, with our selected conditions our strategy is pretty profitable after only 57 trades. Now we can feel confident to let our scanner run automatically. This will happen as long as your scanner is "Active", and you will receive real-time alerts when a new result comes in.

The great thing about this is that you can now focus on other things, and let Prosperse do the work for you. You can also use this strategy as a base, and tweak it to your liking. For example, you could add a condition to only scan for stocks that are above the 200SMA, or only scan for stocks that are in a specific sector.

Many different combinations of strategies can be employed to master the stock market. You can also leverage our guide on swing trading and create some custom swing trading strategies.

The possibilities truly are endless, and with a little bit of effort and practice - you may build the next millionaire trading strategy!

Start scanning and back-testing today!