How do I find chart setups?

Using filters to find stocks is a major reason for my success

A big part of trading is having setups come to you…not deciding that a trade “looks good” because you came across a chart pattern randomly.

Have you ever done traded a chart that you came across randomly? Perhaps someone tweeted a setup they thought looked good. Or a stock was in the news and again…the chart “looked good”

Trading like that is a big mistake. Why?

Because while it may or may not work out, it shows a lack of discipline. Trading is all about discipline.

Finding a chart that meets ALL of the criteria is super important.

So is having chart patterns that all share the same basic traits, not random trades here and there. If you want to trade long-term, you need to have a consistent method.

My method to find ideal chart setups is to filter the entire universe of stocks and find only the ones that fit the pattern that I know inside and out. This way, you create the filter once…in a calm and collected place and it runs every day, showing you potential stocks that meet your major criteria.

The results from my filters are the ONLY charts I look at. I don’t get sidetracked.

Ok, so which is the best overall way to filter and screen stocks for me?

Finviz.com [Will open up a new browser, so you can continue reading here and follow-along]

It is is quite simply…the easiest way I have found to the best chart setups. Best of all, it is completely free!

There is an “Elite”, paid version…which does away with the annoying pop-up ads and also has a lot of awesome extra features. If you find yourself using the free service, and your trades are working out…then yes, it would make sense to sign up for the paid version.

But definitely – give it a try!

Here is an example of a screen that I use…

You can see that I’m primarily using the technical and descriptive filters.  In this particular screen, I am filtering for:

  1. Market cap – over $300 million
  2. Weekly performance – down 10% for the week
  3. Price – over $1/share
  4. Moving average – the 50 day moving average is above the 200 day moving average
  5. Average volume – over 1 million shares

You can With this screen, you can see if have 15 results. That is only 15 charts that I need to look through for this morning. This is just the starting point.

Finviz tip: The default view of the results will be the “Overview”.  You can see that tab on the bottom left of the image above.  I like to set the results to “Charts”.  You can see that is the tab that is I am viewing in the image above since it is in blue.  This way, you can quickly scroll through the charts to see in an instant whether the chart is the type of chart that has exactly what you are looking for!

I might not like any of the chart setups that day

They might not fit everything that I am looking for. But what I have here is only 15 stocks to look at…odds are there might be 1 or 2 charts that are screaming buys!

This is the key to not getting distracted. To not chase the shiny object (stock chart) that you happened to stumble across. If there are no setups that day, you know what I do? I don’t trade! There is always tomorrow.

Bottom line – give Finviz.com a try.

Let me know your thoughts…leave me a comment below!

Glenn