Imagine the wave of information that the entire financial trading market represents. Potentially thousands of currency pairs mixing the 180 official currencies, tens of thousands of publicly traded companies, more than 20,000 cryptocurrencies, and hundreds of globally traded commodities that span energy, metals, agriculture, and livestock.
It’s impossible to process all that information, with even a fraction of it threatening to sweep traders off course. To make financial markets as accessible as possible, trading platforms offer stock screeners that narrow the market universe to a filtered shortlist. Before a trader opens a single chart, these tools use predefined criteria to narrow the market to instruments that match the trader's selected filters.
Traders using Contracts for Difference (CFDs) use stock screeners to find shares that align with their personal criteria, including liquidity, technical conditions, or sufficient price movement. This article explores how to use a stock screener for CFD trading and touches on how traders can use these tools to build a focused, precise watchlist for their trades.
What a stock screener does
A stock screener is a financial analysis tool that adds filters to markets based on pre-established criteria. Instead of having to review every single available option, a stock screener ensures that traders only see CFDs that meet their conditions. From this reduced view, it’s much simpler to conduct further analysis to identify the opportunities they want to act upon.
Stock screeners use two categories of information to filter CFDs:
- Fundamental data: Filters that focus on the financial characteristics of a company, such as market capitalisation, price-to-earnings (P/E) ratio, earnings growth, revenue, dividend yield, and sector.
- Technical data: Filters that observe market behaviour rather than fundamentals. For example, current share price, daily trading volume, moving averages, average daily range, percentage price change, and Relative Strength Index (RSI).
Typically, in CFD trading, technical data is more relevant, as it provides insight into shorter-term market signals. Fundamental data sources are typically more closely inspected by investors looking to establish long-term positions.
While a share screener helps with research and consolidating options that meet your criteria, it doesn't provide any buy or sell signals. Results are never guaranteed, and using a screener isn’t a replacement for in-depth chart analysis and risk management strategies. It’s simply one of the many research tools in a trader’s arsenal.
Why screener criteria differ for CFD traders
Screener criteria reflect the objectives of the user. A long-term trader may use signals that could align with a stock being a good option for investment over a larger period. Factors like company valuation and earnings growth, alongside contextual factors like competitive advantages, would all help when planning for long-term investments.
Although these filters may come into the research process of a CFD trader, they are typically looking for much shorter-term deals. When trading CFDs, you don’t own the underlying asset. While positions can be held over the longer term, CFDs are generally suited to shorter-term trading, making technical analysis and fast-moving market opportunities a greater focus.
For example, when a CFD trader uses a stock screener for day trading, they would select criteria from the technical data category to better surface relevant picks. A stock experiencing elevated volatility during earnings season may be relevant to a shorter-term strategy; a volatility filter can help identify higher levels of trading activity.
Many CFD traders place greater emphasis on technical analysis due to their shorter trading horizon.
Core filters to understand in a stock watchlist
The vast majority of stock screener platforms include hundreds of potential filters that a trader could toggle. The high degree of flexibility allows traders to prioritise the exact kind of information that most interests them, saving them time compared to manually searching through the wider tide of financial information.
There are four main categories that govern stock screeners and allow traders to customise what they see on their chosen trading platform.
Volume and liquidity
Trading volume is a measure that defines how many total shares have been exchanged over a given period. The period of time chosen here is also configurable, allowing traders to detail the exact scope they’d like to gather information for.
A high daily trading volume indicates that there is a higher market participation in that moment, which could contribute to tighter pricing. By contrast, lower-volume shares may experience wider spreads and larger price gaps, especially during any periods of heightened volatility.
By setting a minimum average daily volume within a stock screener, traders can instantly remove illiquid shares from their view. While liquidity doesn’t directly indicate whether a price will rise or fall, it may influence how easily and efficiently positions are opened or closed.
Price and volatility
Filters for price narrow results to shares within a predefined trading range based on a trader’s chosen currency. What constitutes the correct option here is completely personal to the trader. One may favour lower-priced shares because they could generate a larger percentage movement, while another might prefer to focus on higher-priced shares with a well-established trading history.
Volatility is another pricing-based filter that sorts based on which assets are experiencing larger-than-average movements in their current price. This filter is commonly used by CFD traders, as many focus on markets experiencing price movement rather than stability, making volatility an important consideration.
The Average True Range (ATR) is a typical technical analysis indicator that helps to quantify market volatility. It measures the average range of an asset's price movement over a period, providing a quantified measure of volatility.
Technical indicators
As previously mentioned, traders may choose to layer on technical indicators to add filters to their stock screener. By adding several technical indicators, like Bollinger Bands or Moving Average Convergence Divergence (MACD) crossovers, traders can organise their shares into a group that currently displays similar characteristics.
These indicators aim to give more context to traders, often as another piece of the puzzle in a broader chart analysis strategy.
Fundamental filters
Although not as relevant to CFD trading, fundamental filters may still provide useful context. Adding a filter for revenue growth or sector classification can help narrow your stock screener results for more targeted research.
Building a screener workflow
Approaching trading research with a specific workflow can expedite the process of finding markets that may warrant further analysis. A designated workflow will also ensure traders use the same criteria each day, allowing them to establish a consistent understanding of their view in front of them.
Below is a purely illustrative example of building out a screener workflow:
- Select the exchange: Choose the market you want to analyse to remove unnecessary results.
- Apply a minimum volume filter: Remove shares with relatively low trading activity to narrow your list to assets that are currently experiencing sufficient market participation.
- Add a volatility filter: Use one of the many volatility filters, like ATR, to identify shares experiencing relatively higher price volatility.
- Apply a trend filter: Directional filters will help shortlist candidates that are moving in a trader’s preferred direction.
- Add optional momentum indicators: Layers for momentum indicators, like MACD, provide additional information for traders.
- Review individual charts: After adding all these layers, traders can now review their curated shortlist, investigating the shares that have made it through each filter in more detail.
The TradingView Stock Screener consolidates screening filters with integrated charting tools for a more holistic, complete view of assets. Blueberry clients can access TradingView directly through the Blueberry TradingView platform.
From screener output to watchlist
A stock screener cultivates a shortlist of stocks based on the criteria a trader selects. While this can reduce the number of stocks to review, it doesn’t give any information about whether to buy or sell, nor does it curate a list of stocks to begin trading with.
On the contrary, screeners should only come into a trader’s process as initial research. Detailed chart analysis and aligning their picks with a trading plan will come next before they make any decisions.
If an asset passes further investigation, traders can add it to a watchlist. A watchlist will retain information about each stock over multiple sessions, allowing traders to build long-term familiarity with those stocks. Blueberry’s article on how to manage the TradingView Watchlist provides more information on building an effective watchlist from screener outputs.
Common screening mistakes to avoid
Even the best stock screener is only useful to wade through wider markets in search of specific kinds of assets. Their efficacy is directly tied to how a trader uses them, with several common mistakes leading to poor outputs.
Here are the most common screener mistakes to be wary of:
- Over-filtering: Applying an enormous number of filters will produce zero or near-zero results, preventing any useful insight from being gained.
- Ignoring liquidity: Forgetting to set liquidity filters will mean that stocks with insufficient daily volume appear in trader results.
- Not reviewing settings regularly: Market conditions may change which filters are most useful to a trader in any one period. Regularly updating the filters a trader works with will ensure they capture the exact market dynamics they are looking for.
By understanding these mistakes ahead of time, traders can get the maximum utility out of their stock screeners.
Risks of using stock screeners in CFD trading
CFD trading is high-risk and not suitable for all traders. When using leverage, outcomes are amplified in both directions, meaning losses can exceed the initial margin. Even with a curated view through a stock screener, there are no future guarantees when trading.
Screener results are generally more effective when incorporated into a broader, rigors research process with risk management considerations taken. Past market behaviour, historical screener performance, or any previous outcomes never guarantee future results.
Due to the considerable risks associated with CFD trading, it may not be suitable for every trader.
Start trading CFD shares with Blueberry
Blueberry offers access to global share CFDs through professional trading platforms, helping traders find the tools they need to analyse markets, create watchlists, screen shares, and watch market charts in action. As a licensed and regulated CFD broker, Blueberry combines fast execution and advanced trading technology to help traders access and analyse global financial markets.
Discover more about trading share CFDs with Blueberry and explore the trading platforms we have available.
Disclaimer: All material published on our website is intended for general information and educational purposes only. It does not constitute personal financial advice, as it does not take into account your objectives, financial situation, or needs. Margin FX and CFDs are complex and high-risk financial products that may not be suitable for all investors. These products are highly leveraged, gains and losses are magnified, and you may lose substantially more than your initial deposit. Investing in these products does not provide any entitlement to the underlying assets (e.g., the right to receive dividend payments). We recommend seeking independent financial advice before making any investment decisions.