Find the best stocks under a minute
plus 9 other reasons why scanners are essential for a trader!
My Aspiring Peak trader,
Hi.
I know you already dig my stock scanners, but if you do not for whatever reason (maybe some Furu on Twitter said manual scanning is the best thing and you believed it), let me tell you why you should.
In this article, I will tell you the answer to the following questions:
What does a scanner do?
Top 9 ways how a scanner can help you?
Important: If you are a zero-experience beginner starting out and just learning charts, let me be the first one to tell you that there is NO substitute for manually staring at loads and loads of charts. Scanners come in the next step when you know what you want to see in those charts. clear? Good!
What does a scanner do?
A scanner simply gives you a list of stock that satisfies your input conditions.
For eg. if your conditions are as below and you want to know how many stocks out of the total ~2000 NSE stocks pass these criteria:
a) close price above 20
b) close price above SMA 50.
c) High price at a 52-week high.
You will see that, right now
Out of 2000 stocks, 1830 are above 20 rupees; 1497 are priced above 20 and 50 SMA; while only 74 are priced above 20, above 50 SMA, and at their 52-week high price.
So, scanners are TOOLS for analysis. Nothing more, nothing less.
And as it goes for any tool, it needs to be in the right hands for it to be used effectively. What's the use of a stethoscope in the hands of a policeman, eh?
Therefore, for a scanner to be effective, you need to first know what exactly are you looking for, then device/write the scanner which captures the conditions correctly.
You cannot be looking for a momentum candidate and run a 52-week low scanner. Do you see my point? Yes? Ok great.
Which brings me to the next question. Have you ever thought of the various ways a scanner can help you? Especially if you are just starting out. Anxious, too many set ups and strategies?
Read on….
Top 9 ways how a scanner can help you?
Cuts your scanning time multifold.
when you are scanning through 2000 NSE stocks, surely you are looking for something right? It may be the tightness you are looking for or just a feel of the number of stocks that are in an uptrend/downtrend. Or the number of stocks around the 52-week highs/lows. Whatever that may be, it can be coded as a scanner and be done with a click.
A 120-minute scanning time can be cut into 20 if not 2.
Solves the beginner’s problem: Helps you FOCUS.
So if you are a beginner, you will have 3 major roadblocks in your journey:
a) You don’t have a set-up
b) If you are learning one (probably from someone like me on Twitter), but you do not have enough confidence.
c) You are interested in multiple setups but do not know which one works the best for you.
The solution to all of this is to FOCUS. Just pick one (or multiple, but less is better when you start) set-up and practice it every day.
Here is where scanners come in handy. How?
Want to learn High tight flags (HTFs)? Run an HTF scanner and see nothing else.
Want to learn how to trade a pullback? Run a pullback scanner and see only pullbacks.
Therefore Scanners help you FOCUS on that one set-up (which will make you rich someday, No kidding).
You code your set-up and only look at those stocks which are filtered in that particular scanner.
Accelerates your learning of a particular set-up:
So imagine you wanna learn Math. What business do science and social science textbooks have on your table?
Just like that, if you want to learn and master that 1 PEAK setup, having stocks in front of you for only that setup will accelerate your learning, just by cutting down your exposure to anything else.
Saves your Mental bandwidth:
By eliminating setups and stocks of lesser priority, it frees up so much mental bandwidth. Your trading as a whole improves by this as you are giving the most time to the set up which is the most important.
Cuts JUNK stocks:
Even if you decide to go through a whole list, using filters like close <20, market cap <100 cr or volume filter will drastically eliminate all the junk stocks from your radar.
Real-time data; Real-time learning:
This is important. Hindsight is a bad mafioso. We are all gangsters when it comes to analyzing stocks using hindsight. For sure, we should have bought it there and sold it here.
Scanners will give you the patterns (or price action or the signal) in real time. It will facilitate instantaneous decision making by showing you the price action before a stock move again and again.
REAL-TIME.
Market Breadth indicator:
Remember our chat about the central dogma of trade? The first thing to look for before initiating a trade is to look for conducive market conditions. Simple, and I say dead nursery level simple scans can help you align yourself with favorable market conditions.
Trading when the time is only right will eliminate 50% of your trading problems.
Obliterates FOMO (fear of missing out):
Once you have a set-up and a scanner for that set-up, you will start winning the battle with fomo. Social media rockets will not raise your heartbeat anymore. A sense of calm and tranquility will descend into your life (you will actually start to enjoy life a bit more).
Backtesting:
Lastly, scanners can help you manually (or using some Excel sheet) backtest your set-up, a new setup, or any modifications to a setup. I highly encourage you to experiment on this front. What works for everyone else, may not work for you, and vice versa. The edge comes from doing a profitable thing that only a few are doing (or better, no one knows about).
My Top 9 free chartink scanners, and when and where do I use them?
Every day after the market closes (or the weekend), I run the following scanners:
RFDL (run for dear life scanner):
Scans for stocks crossing below 200 DMA, & as we all know, “nothing good happens below the 200 DMA”, it gives me a sense of the breadth of the market. Eg., A lots of names here, the market is bearish.
52-week high daily (or weekly):
This scanner also gives me a feel for the market breadth. the higher the number and increasing means that the market is bullish.
52-week low daily:
This helps me breadth-wise as well as it tells me which sectors or industries are a must avoid. If there are many IT names on this list, surely my longs won't come from IT. (See again, feels. Man i am a feels guy. Can't help it. Moving on).
The High Tight Flag Scanner:
After getting a fair idea (or feels man) of the market health, I move to my favorite “proprietary” (LOL) scanner which scans for my bread and butter set up, the high tight flag.
Now this scanner is shared only with my TA masterclass gang. So if you want special access, please register using this Google form to book a seat for the next batch (later this year).
You can also access to the recorded course of the previous batch. To do that, send me an email or hit me up on Whatsapp 9481506784 with feels.
The HV scanner:
Highest daily volume in the year. This is another peak scanner I run to find stocks under strong accumulation. Some decent winners in the last month using this scan eg. Bharat Wires, RVNL, Olectra etc
The TGP (tradable Gap pivot) scanner:
This one scans for any buyable gaps. I run it as soon as the market opens and periodically throughout the day. It is a set-up entry scanner meaning, any hit is ready to be bought. I also had some good trades using this scanner in the last month, eg. SBCL.
52-week high close:
On the weekend, I religiously run this scanner. Remember most of your PF stocks should be in this list. Every multi-bagger will definitely be caught by this scan.
The Stage-2 breakout scanner:
Stocks breaking out of a probable stage 1 base post a downtrend. This is a peak scanner for a long-term techno funda investor. Most names that have recently been breaking out to stage 2 like, Neulands Labs, Marksan Pharma, Newgen Software, Cyient, Zensar tech, and a lot more have been caught breaking out by this scanner. I bet there are some peak names in there right now now.
The VCP epic scanner long-term:
Scans for a long-term VCP. Not sure how it has turned out. I am hoping you will tell me. If you find any VCP using this, remember to please post the chart on twitter and tag your Homma. I beg of you. I have found VCP coding to be the hardest till now.
The Pullback post a 20% move in a month (low-risk entry) scanner:
This is so so good, that I had trouble making it public. I could have monetized this shit (actually I have a turbo scanner for that so it's okay). If you are a swing trader, this one is for you.
And if you don’t like scanners at all, good luck. Come join the party when the manual scanning is done. But I can't promise the beers will be left by then.
*** All the scanners are available as a part of my course and my private access group. details below
If you are a beginner trader, struggling to be consistently profitable.
Sakatas Homma can help you level up in the following 2 ways below:
The Sakatas Homma TA masterclass for beginners:
A monster course (12-15 hours total). Hourly sessions on weekends. Twice a year.
Please register for the fall 2023 course (September 2023) using the link below.
https://docs.google.com/forms/d/e/1FAIpQLScfnQA1w9WDTtTAPEHIqzkS9jhRSZFA1BZXuWRZ5JPZ3Qfu8g/viewform
Watch my 1st session of the spring 2023 batch.
Homma Private Access membership:
HPA is a subscription-based educational service (on WhatsApp). Benefits include:
Daily Market Breadth Update.
Access to my scanners and dashboards and charting layouts.
Weekend hourly session and Q&A.
Live updates on my portfolio and the trading setup rationale.
Live updates of key setups I am tracking.
Yearly membership of 6000/- INR only (this price is for the Founding batch and will apply till September 2023)
UPI payment & WhatsApp @ 9481506784.
This is all for this weekend,
I will see you in the next one. Till then,
Don’t stop asking those stupid questions.
~ Homma
Some Peak Scanners for you:
Pullback to 10/21 ma: https://chartink.com/screener/copy-shpb1021
VCP (long-term timeframe): https://chartink.com/screener/shvcp-epic-modified
sector rotation/ Relative strength dashboard:
https://chartink.com/dashboard/177929