Scanning Tools for Technical Setups

Scanning tools filter thousands of stocks down to actionable candidates. Without a screener, you're manually reviewing charts one at a time—an approach that works for 20 stocks but fails at scale. A well-constructed scan for "price above 200 SMA, RSI below 40, and average volume above 500,000" reduces 8,000 US equities to perhaps 50 candidates in seconds. The practical skill isn't finding a screener (many exist) but building scans that produce quality results without excessive false positives.

What Scanning Tools Actually Do (Why This Matters)

Stock screeners query databases against your specified criteria and return matching symbols. The value comes from:

1. Speed: Evaluating 8,000 stocks manually takes hours; a scan takes seconds
2. Consistency: The scan applies identical logic to every stock, eliminating oversight
3. Backtestability: Saved scans can be reviewed historically to assess hit rates

The practical chain: Define criteria → Run scan → Review candidates → Apply judgment → Execute (or pass)

Scanning doesn't replace analysis—it precedes it. The scan generates a watchlist; you still evaluate each candidate individually.

Major Scanning Platforms Compared

FinViz (finviz.com)

Strengths:

• Free tier includes robust filtering (technical, fundamental, descriptive)
• Visual output (chart thumbnails) for quick pattern recognition
• Heat maps for sector/market overview
• No account required for basic scans

Limitations:

• End-of-day data only (free tier)
• Limited custom indicator support
• No multi-timeframe scanning
• Cannot save more than a few scans without Elite subscription ($39.50/month)

Best for: Quick daily scans, pattern screens (new highs, oversold bounces), fundamental + technical combo filters.

TradingView (tradingview.com)

Strengths:

• Real-time data (with subscription)
• Custom Pine Script indicators scannable
• Multi-timeframe conditions (daily RSI with weekly trend)
• Community-shared screeners
• Direct charting integration—click result to open chart

Limitations:

• Free tier limited to 3 saved screeners
• Pine Script learning curve for custom indicators
• Performance slows with complex multi-condition scans
• Pro subscription ($14.95-$59.95/month) required for real-time

Best for: Traders who use TradingView for charting and want integrated scanning, custom indicator scans, intraday setups.

TC2000 (tc2000.com)

Strengths:

• EasyScan formula language (simpler than Pine Script)
• Fast multi-condition scanning
• Condition Wizard for non-programmers
• Real-time scanning with alerts
• Paper trading integration

Limitations:

• Subscription required (Silver $9.99/month, Gold $29.99/month, Platinum $89.99/month)
• Windows-focused (web version less powerful)
• Smaller community than TradingView
• Learning curve for advanced formulas

Best for: Serious technical traders willing to pay for speed and flexibility, those who prefer desktop software.

Building Effective Scan Criteria

The Three-Layer Framework

Structure scans with three logical layers:

Layer 1: Universe Filter (What to Scan)

• Price minimum (>$5 to exclude penny stocks)
• Volume minimum (>200,000 to ensure liquidity)
• Exchange (NYSE, NASDAQ to exclude OTC)

Layer 2: Trend/Context Filter (Is the Environment Right?)

• Price vs. 200-day SMA (uptrend/downtrend)
• Sector performance (relative strength)
• Market cap range (if targeting specific size)

Layer 3: Signal Trigger (What Specific Setup?)

• RSI level
• Moving average crossover
• Price pattern (breakout, pullback)

Worked Example: Pullback Scan in FinViz

Objective: Find stocks in uptrends that have pulled back to potential support.

Layer 1 (Universe):

• Price: Over $10
• Average Volume: Over 500,000
• Exchange: NYSE, NASDAQ

Layer 2 (Trend Context):

• SMA 200: Price above SMA200
• SMA 50: Price above SMA50

Layer 3 (Pullback Signal):

• RSI (14): Below 40 (pullback without collapse)
• Price: Within 3% of SMA50

FinViz settings:

• Screener → Technical → SMA200 above → SMA50 above → RSI(14) Oversold (40)
• Screener → Descriptive → Price Over $10 → Average Volume Over 500K

Expected results: 10-50 stocks on a typical day, depending on market conditions.

Scan Output Management: Reducing False Positives

A scan returning 200+ results is too broad. A scan returning 0 results is too narrow. The goal is 10-50 candidates for manual review.

Filtering Too Many Results

Filtering Too Few Results

The point is: Some days your scan will return nothing because the market doesn't offer what you're looking for. That's information, not a problem to fix by weakening criteria.

Platform-Specific Scan Examples

FinViz: Bullish Moving Average Crossover

Settings path: Screener → Technical

Typical results: 15-40 stocks daily.

TradingView: RSI Divergence Scan (Custom)

Pine Script condition example:

rsi = ta.rsi(close, 14)
priceLowering = low < low[5]
rsiRising = rsi > rsi[5]
bullishDivergence = priceLowering and rsiRising and rsi < 35

Usage: Stock Screener → Filters → Add Custom Filter → Paste Pine Script condition.

Typical results: 20-60 stocks, depending on market conditions.

TC2000: New 52-Week High with Volume

EasyScan formula:

H = MAXH252   // Price equals 252-day high
AND V > AVGV50 * 2   // Volume 2x above 50-day average
AND AVGV50 > 200000   // Baseline liquidity

Typical results: 5-25 stocks on breakout days, 0-5 on quiet days.

Scan Scheduling and Workflow

Daily Scanning Routine

Weekly Scanning Routine

Common Scanning Mistakes

Mistake 1: Over-Optimizing for Historical Winners

You backtest a scan and add conditions until it perfectly captures past winners. The result: zero signals going forward because you've curve-fitted to history.

The fix: Keep scans simple (3-5 conditions maximum). Accept some false positives as the cost of catching real setups.

Mistake 2: Ignoring Sector/Market Context

Your scan finds 30 pullback candidates, but all are in one declining sector. The scan is working technically but ignoring that the entire sector is in a downtrend.

The fix: Add a sector relative strength filter or manually check sector context before acting.

Mistake 3: Treating Scan Results as Buy Signals

The scan found the stock; therefore you buy. But the scan doesn't know about tomorrow's earnings, the pending FDA decision, or the massive resistance level 2% above.

The fix: Use scans to generate candidates, not decisions. Every scan result requires manual review before action.

Mistake 4: Running the Same Scan in All Market Conditions

Your pullback scan works well in uptrending markets but produces losing trades in downtrends. The scan logic is sound; the application is wrong.

The fix: Disable or modify scans based on market regime. A breadth filter (S&P 500 above 200 SMA) prevents buying pullbacks in bear markets.

Limitations and Risks

Scanning tools have specific weaknesses:

1. Data quality varies: Free platforms may have delayed or incomplete data. Verify results before acting.

2. Indicator calculations differ: FinViz RSI and TradingView RSI may produce slightly different values due to calculation methodology.

3. Pattern recognition is limited: Scans can find "price near trendline" but cannot reliably identify complex chart patterns like head-and-shoulders.

4. No fundamental context: A technically perfect setup in a company with deteriorating fundamentals remains a bad trade.

5. Crowded trades: Popular scans (52-week high, golden cross) identify the same stocks for everyone. Crowded entries often fail.

Next Steps

1. Choose one platform to master first—FinViz for free/simple, TradingView for integrated charting, TC2000 for power
2. Build a single scan matching your strategy—pullback if you're a dip buyer, breakout if you're momentum-focused
3. Run the scan daily for two weeks without trading—observe what it finds and whether those setups perform
4. Refine based on observation—too many results means tighter filters; too few means looser filters or different criteria
5. Save successful scans with descriptive names—"Uptrend-RSI35-Pullback-500Kvol" tells you exactly what it does

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Related: Combining Indicators Without Double Counting Signals | Breakout and Breakdown Confirmation Rules | Backtesting Basics for Retail Traders