Watchlist Builder: A Step-by-Step Guide
Your Starting Point for Great Investment Ideas
A great strategy is useless without the right stocks. The Watchlist Builder is designed to solve that problem. It helps you cut through the noise of thousands of companies to create a short, high-quality list of stocks that match your specific criteria. This is the essential first step before using the Best Strategy Finder.
How It Works: Building Your Screen
The tool is organized into four tabs, each representing a different category of filter. You can combine filters from any tab to create a highly specific screen.
1Descriptive Filters
Start here to define the broad universe of stocks you're interested in. This is your high-level filter to narrow the ocean of thousands of stocks into a manageable pond.
- Exchange / Country: Narrow your search to specific markets.
- Sector / Industry: Focus on areas you understand well, like "Technology" or "Software."
- Market Cap: Define the size of companies you want to look at, from massive "Mega Cap" stocks to smaller, high-growth "Small Cap" companies.
2Fundamental & Technical Filters
This is where you define the specific characteristics of the companies you want to find. The real power comes from combining these filters.
Example Idea: Let's find profitable, reasonably-priced growth stocks that are in a strong uptrend.
- Go to the Fundamental tab and set P/E Ratio to "Profitable (>0)". This ensures the company is making money.
- Still on the Fundamental tab, set Quarterly Revenue Growth to "> 25%". This finds companies that are growing quickly.
- Go to the Technical tab and set 50-Day MA to "Price above SMA50". This finds stocks in a solid medium-term uptrend.
- Still on the Technical tab, set 200-Day MA to "Price above SMA200". This confirms the long-term trend is also positive.
3Performance Filters
This tab lets you filter based on past price performance. For example, you could look for strong stocks that have pulled back recently by setting Perf (Year) to "Up > 50%" and Perf (Month) to "Down 0% - 10%".
4Run & Analyze
Once you've set your criteria, click Run Screen. The tool will scan the market and return a list of all the stocks that currently meet your exact requirements.
This list is your starting point. From here, you can take these tickers over to the Best Strategy Finder to discover which specific technical strategy has historically worked best for each of them.
Parameter Definitions
Descriptive
Market Cap: The total value of a company's shares. It's a quick way to gauge a company's size (e.g., Mega, Large, Small).
Fundamental
P/E Ratio: Price-to-Earnings. A classic metric to see if a stock is cheap or expensive relative to its profits. Lower is generally considered better value.
Forward P/E: Similar to P/E, but uses analysts' estimated future earnings instead of past earnings.
PEG Ratio: P/E Ratio divided by the earnings growth rate. A value under 1 can suggest a stock is undervalued relative to its growth.
P/S Ratio: Price-to-Sales. Useful for valuing companies that are not yet profitable. Lower is generally better.
P/B Ratio: Price-to-Book. Compares a company's market price to its "book value." Often used for value investing in sectors like finance.
EV/EBITDA & EV/Sales: Enterprise Value ratios. They are often considered more comprehensive than P/E or P/S because they include debt in the company's valuation.
Return on Equity (ROE): Measures how effectively a company's management is using investors' money to generate profits. Higher is better.
Return on Assets (ROA): Measures how efficiently a company is using its assets to generate earnings. Higher is better.
Current & Quick Ratio: Measures a company's ability to pay its short-term debts. A value over 1 is generally considered healthy.
Debt/Equity: Shows how much debt a company is using to finance its assets relative to the value of shareholders' equity. A high ratio can indicate higher risk.
Gross, Operating, & Net Profit Margin: These show what percentage of revenue is turned into profit at different stages. Higher margins are a sign of a more efficient and profitable business.
Technical
Beta: Measures a stock's volatility relative to the overall market (S&P 500). A beta of 1.5 means the stock is 50% more volatile than the market.
Average Volume: The number of shares traded per day, on average. High volume indicates strong investor interest.
Relative Volume: The current day's volume compared to the average. A value over 2 means the stock is trading at more than twice its usual volume, which can signal a significant event.
RSI (14): The 14-day Relative Strength Index. A momentum indicator that measures the speed and change of price movements. A reading below 30 is often considered "oversold" and a reading above 70 is "overbought."
50-Day & 200-Day MA: Whether the price is above or below its 50-day (medium-term) or 200-day (long-term) Simple Moving Average. Being above these averages is a common sign of a bullish trend.
vs 52W High/Low: Shows where the current price is in relation to its highest and lowest points over the past year. Stocks near their highs are often showing strong momentum.
Performance
Perf (Week, Month, etc.): The stock's total price return over the specified period.
Perf (3Y, 5Y, 10Y CAGR): The Compound Annual Growth Rate over the last 3, 5, or 10 years. This shows the average year-over-year growth rate over a longer period.