Ask Colin

You seem to scan the charts first and then look at the fundamentals. Isn't it easier to scan the fundamentals first?

It really does not matter much. I actually do it BOTH ways. I do some fundamental scans to come up with cheap stocks or fast growing stocks and then check the charts. I also scan price data looking for value and growth model charts and then research the fundamentals.

Since I have Insight Trader charting software, I can scan the market for uptrending stocks using system filters. This reduces the 1500 odd stocks to a manageable list that I can chart automatically and step through with a visual scan. I can check PE ratio and dividend yield as part of the visual scan, so usually I can get to a short list quite quickly.

I can also run System filters on PE ratios and dividend yields, chart the list automatically and scan for the uptrending ones.

So, actually I do it both ways. Either is fine and actually I find some benefit from doing it BOTH ways, because I often pick up interesting evolving situations on one method that were missed on the other.

One of the problems with automatic scans is that you have to nominate exact criteria. The computer is an idiot in that it applies your rules without discretion. So, for example, I might run a scan looking for PE ratios less than 10. It would throw up ones with a PE of 9.9, but not 10.1. However, the 10.1 PE stock could have an exciting uptrend on its chart. By scanning for the uptrends first, I can use discretion by making the judgement to include the 10.1 PE stock in my short list for research.

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