Have you ever looked at a chart that had a promising chart pattern and wanted a quick and easy way to locate more charts with the same technical characteristics? The StockCharts.com Scan Engine can help you identify charts with any technical characteristics you can think of.
We recommend that you print out this document, place it beside your computer, and perform each step as you read along. The whole process shouldn't take more than 15 minutes and will provide you with a thorough introduction to the use of scans. After you've completed this tutorial you will be able to create a scan using the standard scan interface, verify the results of your scan, create a scan using the advanced scan interface, save your scan for future use, and save your scan results into a ChartList. We are sure you will find this document useful and informative.
Stock scans are useful for finding charts with particular patterns or technical characteristics. StockCharts.com includes over 20,000 different stocks symbols; that's a lot of different charts to look through. You can use our Scan Engine to quickly find just the charts you're interested in. A few examples of interesting characteristics that you can scan for include moving average crossovers, stocks setting new highs or lows, indicators in overbought or oversold territory, and stocks with popular chart patterns.
StockCharts.com has two different scan interfaces, each having its own strengths and weaknesses. The Standard Scan Interface is easier to use than the Advanced Scan Interface but doesn't have as much flexibility. We recommend that you try to create your scan using the Standard Scan interface first. If you hit one of its limitations, you can move up to the Advanced Scan interface without losing any of your work.
We advocate a two-phase approach to scanning. First, build your scan criteria slowly until your scan returns approximately 50 or fewer results. Second, review those results visually in CandleGlance mode, removing any charts that aren't of interest to you. We'll be demonstrating this technique throughout this tutorial.
A common reason to use a scanning tool is to study charts that contain a particular technical signal such as an indicator plot crossing over its center line. In this tutorial, we'll focus on the MACD indicator. The MACD is a popular indicator that consists of two lines: the MACD line, itself, and a moving average of the MACD line, which is referred to as the signal line. When a stock turns around and starts moving higher, the MACD line often crosses above its signal line. Let's create a scan that looks for stocks that have a MACD signal line crossover on increasing volume.
Let's get started; bring up a new browser window and go to StockCharts.com. Once there, log into your account. When the Members page appears click on the "Standard Scan WorkBench" link of your Control Center. You should see something like this:
The criteria box is a light blue box near the center of the page that contains a written description of the current scan – the scan's "criteria." The remaining controls allow you to modify these criteria.
Always start by setting the global filters for your scan. Since we're interested in any stocks that are valued and traded frequently, so
- Click on the Avg. Vol. drop-down box and select >40000
Great! Your global filters should now look like this:
To summarize the conditions we've just set, we are looking for stocks with an average volume greater than 40,000 over the last 20 days and an average price greater than $2 over the last 60 days. Now,
The Additional Technical Expressions area lets you add custom comparisons to your scan. We'll be using it to add the MACD-signal line crossover to your criteria:
Notice that the default MACD parameters are automatically inserted into the parameters field.
Locate the Comparison Operator drop-down box on the same row (directly following the word "ago") and change it to 'x' – our special Crosses Above operator.
Select MACD Signal from the second indicator drop-down box (just to the right of the Comparison Operator)
Finally, we want to add our increasing-volume requirement to the criteria. One way to do this is to search for stocks with volume today that is at least 25% higher than volume yesterday. So, on the next row of the Additional Technical Expressions area,
Click the first drop-down box and select Volume
Set the Comparison Operator to >=
Select Volume from the second indicator drop-down box
Change the Date column to 1
Excellent! The Additional Technical Expressions area should match the image below:
After you click the Update Criteria button, the Criteria Box will read
For the last market close:
All Stocks with…
20-day Simple Moving Average of Volume for today is greater than 40000
60-day Simple Moving Average of Close for today is greater than 2
Daily MACD Line(12,26,9) for today crosses above Daily MACD Signal(12,26,9) for today
Daily Volume for today is greater than or equal to Daily Volume for yesterday times 1.25
At this point, we are ready to run our scan:
The Scan Results page is made up of three main regions: the Criteria region, containing the criteria for the scan; the Scan Results region, containing options for handling the results, and the Summary region, containing the results, themselves. Please note that your results will be different than what you see above because of different market conditions. Above the "Volume" column is the count number that says how many results our scan produced. We will want to pay attention to this number as we focus our results.
On the left hand side of each symbol you will see three small icons that link to different charts for each symbol. The first chart icon will take your a SharpChart for the ticker symbol and will display the chart using your default ChartStyle. The second chart icon takes you to the "Gallery View" page for the ticker symbol and the last chart icon takes you to a P&F chart for the ticker symbol.
Now we're going to save the results of the scan to a ChartList so that you can visually view and remove charts that aren't interesting to you. Near the middle of the screen you will see a grey box labeled Scan Results that contains a drop-down for available actions.
Good work, we're ready to remove charts that don't interest you.
Initially you will be taken to a summary view of the list you just created. There are a variety of different ways that we can view our list of results. Near the top of the page you will see three drop-down boxes.
CandleGlance view displays many small charts in the same format so that you can easily spot charts that you like. Since our scan used the MACD indicator let's add it to our CandleGlance charts to make sure that the MACD is crossing the signal line. Near the top of the page you will see the CandleGlance options boxes.
Now each CandleGlance chart has the MACD Indicator below it. Now we can visually review these charts and remove those that don't have possible reversal pattern we are looking for. Notice that on the right of each resulting chart in our list there is a checkbox, we can use this checkbox to remove charts from the list.
Review the CandleGlance charts on the page & check the checkbox beside and chart that does NOT look promising to you.
When down, Click on the Move Selected to Trash button that is located near the bottom of the page
Excellent Work! We've now created a stock scan using the standard scan interface, saved the results to a list, and verified the results visually removing any charts that we didn't like.
Let's return to the standard scan interface and save the scan's criteria so that we can run this same scan in the future.
In order to save your scan for future use you should:
Locate the drop-down box that contains the text "- Your Favorite Scans –". It is located directly above the right corner of the blue criteria box
Open that drop-down box and select "→ Add/Modify the Current Scan <–"
In the resulting prompt window enter a description for this scan - "Tutorial Scan" for example, then click OK.
Now, let's verify that the scan was added to the Favorite Scans menu.
You can now re-run this scan at any time by returning to the either scan interface and selecting it from the Favorite Scans drop-down box. You can also run saved scans from a drop-down box on the "Members" page.
The Advanced Scan Interface can do all of the things that the standard interface can do with several important additions, including: 1) the ability to create conditions with more than one indicator on each side of the Comparison Operator, and 2) the ability to create scans that join different conditions together with "OR" logic.
For the purpose of this tutorial, let's add a requirement to our MACD scan. Let's also scan for stocks where the MACD Line has been below zero for at least 10 days. This will further ensure that our scan only returns stocks that are really starting to turn around after a decline.
Let's start by converting our existing scan into an "Advanced" scan.
You should see our advanced scan page appear with our previous scan criteria displayed in the large Scan Expression section in the middle of the page. Below that is the Scan Builder section with a large number of drop-down boxes.
The Scan Expression section let's you enter any scan expression you want just by typing it in. You need to follow a certain sets of rules when entering an advanced scan however – those rules are also called "Syntax". You can click the "Check Syntax" button at any time to see if your scan still conforms to the rules the scan engine expects.
Since we just converted an existing Standard Scan into an Advanced Scan, our syntax should be fine at this point. Let's use drop-down boxes in the Scan Builder section of the page to add another clause based on the MACD Line:
Select MACD Line from the "Price, Volume, and Indicators" drop-down
Click on the Insert button
A predefined MACD Line expression is added to the end of our scan. However, we'll need to modify it to make it do what we want:
Between the left square bracket and "MACD Line" insert "max(10,"
Add a second closing parenthesis after the closing parenthesis of the MACD Line function to complete the "max()" function
Finally, change the comparison operator in the clause from '>' to '<'
After these changes your Scan Expression should match this:
The final clause is now looking to see if the "Maximum" value of the MACD Line during the past 10 days is still less than zero. If it is, we can be sure that the MACD Line remained below zero for that entire time.
Directly below the scan expression region text should appear notifying you that your scan syntax is correct. If this is not the case you should check the expression that you have against the expression above and make any corrections. Once our syntax is correct we can run our scan:
You can now review and save your scan results just like we did before. We can even save our scan criteria for later use using the same methods described earlier.
If you run your scan and don't get any results, start removing a clause at a time until you get results. Once you've identified the problem clause leave it out and put the other clauses back in one at a time until you've reduced your result set down to a manageable number.
If you run a scan and get 999 results, you need to add more clauses. Increasing the average price and volume settings is a quick way to reduce your results count.
Helpful Tip ~ Need more examples? You can use either scan interface to look at the criteria for any of our predefined scans using the "Predefined Scans" drop-down on the advanced interface or the "Scan to Insert" drop-down in the standard interface.
Congratulations! You've successfully created a scan, saved the scan, saved the results of the scan in a list, and removed charts from that list. The steps that you've just learned can be used to create just about any scan.
If you'd like more information about scanning, a couple excellent resources are the Scan Instructions Page, the Scan Hall of Fame, and the Stockcharts.com Support Forum on InvestorsHub.com. In addition, recent issues of Chart Watchers (our free newsletter) sometimes contain articles regarding scanning.
Unfortunately we cannot create your scans for you from scratch. You must take ownership of your scans especially if you are making trading decisions from them. If you are having trouble or seeing "strange" results, follow these steps:
Read the Scan Instructions page and the Scan Hall of Fame page carefully.
Start with a simple scan and "build up" carefully.
Review the information on our Support Forum at InvestorsHub.com
If that still doesn't solve your problem, cut and paste the scan criteria (i.e., the text in the blue box) from your best effort into our feedback form then send it to us with a detailed description of what you are trying to do. With that information, we are often able to help.
We hope that you will make good use of this and the other tools that we have available.
Good Luck and Happy Scanning!