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THE MARKET WHISPERER 43 9

stocks with prices above 20MA, i.e. stocks trending up. A more advanced
filter would require that the 50MA is below the 20MA, and that the 200MA
is below the 50MA. In this way, you not only assure yourself that the stock
is indeed showing an uptrend, but is trending up for a period of no less
than 200 periods.

The more filters you define, the more you limit the search results, until
at some point a click of the button will return “zero results.” The ideal result
will be around several dozen stocks, which you will then check manually,
one by one, to find those with your required formations.

Over time, you will learn how to define filters that best suit your trading
method, and access the appropriate results with just one click, displaying a
daily list of likely candidates.

The Fundamentals of Using the Scanner
• The objective: identifying stocks suited to your trading method
• Remark: it would not be wise to reach a “perfect” set of filters since

you may miss out on many stocks that do not look ready for immediate
entry, but may nonetheless prove worthy of continued follow-up and
possibly being included in your watch list.

What Are We Looking For?
• Classic breakout and breakdown formations
• Reversals
• Patterns, such as “cup and handles,” “head and shoulders,” etc.
• Stocks showing up or down trends
• Gaps
• Volatile stocks
• High volume stocks (above 700,000 shares per day)
• Increasing volumes

Setting Up the Filters
Every program has its own method for setting up filters, but they are all

fairly similar. The examples shown here are taken from the Stock Fetcher
program.

Example: Let’s say I want to find stocks at no more than $1 from their
year high (i.e. towards a breakout), priced between $10 to $70, with daily
average volume over the past 30 days above 750,000 per day, and trended
up on the previous trading day.