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Screening The Best Setups Doesn't Have To Be Complicated!

By Kristoff De Turck - reviewed by Aldwin Keppens

Last update: Jun 17, 2024

So... You've read the right books, you recognize the importance of trends and market sentiment, and you know that keeping losers small and holding winners for as long as possible contributes significantly to the performance of your portfolio.

There is one more thing you would like to improve. Selecting the right setups is not always as efficient as you would like and you put quite a bit of time into it.

Recognizable... But fortunately, there is a solution. A good stock screener like chartmill can really help you with that. Screening shouldn't be complicated!

Let me give you an example where I look for the best setups in the best performing stocks, based on the closing prices of last Friday, June 14.

Let's start by using some basic filters

  • Price > $5
  • Average Daily Volume > 300.000
  • Market Cap > $300M+
  • Common Stocks Only

1800+ stocks…

ChartMill Basic Filters

Let's add a performance filter...

And since we only want the strongest stocks:

  • at least a 50% increase in the past 3 months.

As expected, a lot of stocks drop out, we continue with only 49 candidates.

ChartMill Performance Filter

...and a Volatilty filter

To ensure that the stock moves sufficiently. An Average Daily Range filter is used for this purpose:

  • ADR(20)% ABOVE 4

37 stocks left... No, we're not finished yet!

ChartMill Volatility Filter

Actually, this is where most screeners stop.

Not so for ChartMill.... We have one last trick up our sleeves! And it is a big one!!

Introducing ChartMill Channels!

ChartMill is able to autonomously recognise support and resistance levels. In the stock screener, these are referred to as ChartMill Channels, specifically the upper & lower ChartMill Channel.

The beauty is that we can set those channels as screening filters from the 'support/resistance' menu on the stock screener page.

We configure the filters in such a way that from the current selection only those stocks are retained that have been between that lower and upper ChartMill channel for at least 10 days.

At the same time, we set a maximum bandwidth of 10% between the lower and upper channel. In this way, the stock screener is able to recognise 'tight ranges'.

  • UCC Length > 10
  • LCC Length > 10
  • Channel Width < 10%

Only 5 stocks left but just take a look at those setups!!

ChartMill Support and Resistance Filter

Using this handful of filters, we managed to get from a database of more than 22000 tickers to just 5 really good quality setups.

That folks, is the added value a good and reliable stock screener like ChartMill can provide!

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