Lesson 05 · Getting Started
You have an account. Now the real question: out of thousands of stocks, how do you find the handful worth watching today? That is what a scanner and a watchlist do.
A scanner filters the entire market down to stocks that meet your rules (price, volume, movement).
A watchlist is the short, hand-picked list you actually monitor after the scanner does the heavy lifting.
The goal is not more stocks — it is fewer, better ones you understand.
Key filters for small-caps: price, float, volume, relative volume, and a catalyst.
Why you need a scanner
There are thousands of listed stocks. Manually flipping through charts is slow and random. A scanner lets you set conditions once and instantly see only the stocks that match — so your attention goes where the activity actually is.
For small-cap day trading specifically, the stocks that move are usually a tiny, changing group each day. A scanner surfaces that group in seconds.
The core filters (and what they mean)
| Filter | What it measures | Why it matters |
|---|---|---|
| Price | The share price range you want (e.g. $1–$20) | Keeps results inside your risk and strategy zone |
| Float | Shares actually available to trade | Low float stocks can move faster on the same volume |
| Volume | Total shares traded today | Higher volume = easier to get in and out |
| Relative volume (RVOL) | Today’s volume vs. its normal average | Shows unusual activity — often the first sign something is happening |
| % change | How far the stock has moved today | Highlights the day’s biggest movers |
| Catalyst | The news or reason behind the move | A move without a reason is harder to trust |
Rule of thumb: volume tells you a stock is moving; a catalyst tells you why. The best setups usually have both.
A simple starter scan
You do not need a complex setup to begin. A clean small-cap momentum scan often looks like this:
- Price: $1 to $20
- Relative volume: at least 3× the normal average
- % change: up more than 10% on the day
- Volume: at least a few hundred thousand shares (so it is actually tradeable)
That single scan filters the whole market down to a short list of stocks that are genuinely active today. From there, you check each one for a catalyst and a clean chart.
Free vs. paid scanners
Good enough to start
- Finviz (free screener — great for learning filters)
- Your broker’s built-in scanner (many now include one)
- TradingView (free tier with basic screeners and alerts)
For faster, live scanning
- Trade Ideas, Scanz, or a broker’s pro tier — real-time data and alerts
- Worth it later, once you know exactly which filters you rely on
Do not overspend early. Learn what each filter does on a free tool first. A paid scanner only helps if you already know what you are looking for.
Turning a scan into a watchlist
The scanner gives you candidates. The watchlist is where you narrow down to the few you will actually watch. A good daily process:
- Run your scan before the open and note which names keep appearing.
- Check the catalyst for each — earnings, news, an FDA result, a filing.
- Keep 3–5, not 30. You can only watch a few properly at once.
- Mark levels — the prices where you would act, before the market opens, not in the heat of the moment.
Discipline beats coverage. A short watchlist you understand deeply will always beat a long one you barely glance at.
Keep learning
Once you can find active stocks, the next skill is reading their charts so you know where to act.
- Compare brokers — many include a scanner built in.
- Broker accounts & rules — the previous lesson.
