Stock Screener 123 Free Form Tutorial



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How To Use StockScreen123 Part 2 Free-Form Formulas By, Marc H Gerstein Everybody cherishes usability, clarity, simplicity, and so forth We all need to start somewhere and most of us can ramp up with a new tool much more quickly if the interface is easy to use But there’s a tradeoff Simplicity can diminish the benefit of using the application At StockScreen123, we work very hard to give you both of the above by, in essence, combining two applications into one The easy application is the
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    How To UseStockScreen123 Part 2Free-Form Formulas By, Marc H Gerstein  Everybody cherishes usability, clarity, simplicity, and so forth We all need to start somewhereand most of us can ramp up with a new tool much more quickly if the interface is easy to use Butthere’s a tradeoff Simplicity can diminish the benefit of using the applicationAt StockScreen123, we work very hard to give you both of the above by, in essence, combiningtwo applications into one The easy application is the Rules Wizard, the subject of Part 1 of thisHow-To series The powerful application is Free Form, the subject of this part of the seriesWe need to keep things in perspective We think Rules Wizard is quite powerful compared toother easy-use screeners But Free Form opens the way to far greater possibilities In fact, itcomes straight from the more professional-oriented Portfolio123 platformUsing Free Form will require more initial effort But its bark is much worse than its bite Once youdive in, you’ll see it’s much more usable than what first impression might suggest Moreover, FreeForm is especially important for those who want to use technical and statistical factors in their screens And it’s vital for ETF investors since the Wizard applies to stocks onlyThis Free-Form tutorial will be organized in three parts: • Interface – You need to know how to find what you’re looking for and incorporate theconcepts you choose into your screens That’s where we’ll start • Acronyms – P/E < 20 seems simple PEExclXorTTM<20 seems a lot less simpleBut it captures important subtleties omitted by the first version of the rule And believe itor not, this acronym and the others are built in such a way as to make it much easier for your eye to quickly find exactly what you need You’ll see Stay with us! • Functions – These are situations where an acronym alone won’t suffice and theyare critical for technical and statistical rules, and for ETFsConsider a simple technical notion: Price>SMA, which means the stock price must beabove the simple moving average That’s certainly simple But it’s also unusable Whichmoving average? The 50-day moving average, the 200-day moving average? We couldgive you two moving average choices, say SMA50 and SMA200 That would be easyBut what about the investor who wants a 10-day moving average? We could add that, butno matter how many we add, we’re always going to encounter users who want a periodwe didn’t offer And this doesn’t even begin to account for those who would like movingaverage periods to be calculated based on some interval in the past, such as the movingaverage for a 5-day period that ended 20 days ago Offering SMA as a function, rather than a variable, allows us to satisfy everybody Hang on You’ll see how, and you’lldiscover that it’s not nearly as hard as it looksFinally, the Appendix will offer a treat for advanced users who build fundamental models, LineItem Variables These let you tap directly into the collection of raw data items supplied byThomson Reuters Using these, you can create your own ratios; custom versions of things weoffer, things you want that we don’t offer (no tool can offer everything for everybody) and/or thingsyou invented that haven’t even occurred to us 2  The Free-Form Interface Click on New Screen and then, after you enter the screening interface, on “Free Form” You’ll seethe followingThere you have it, a blank line on which you can enter your ruleDon’t worry we’re kiddingYou certainly can type in a rule if you want to, or paste a rule you may have copied into your clipboard from someplace else (a posting in the StockScreen123 community, an e-mail fromanother user, something you may see later on in this tutorial series, etc) But no, this is not themeat of the Free form interfaceThere is, actually, an important point to this little prank You will see in a moment that there arelots of menus and many opportunities to populate your rule by pointing and clicking But you don’thave to point and click You can also type or paste Best still, you can mix and match at will Inputting Rules Most Free From users will use point-and-click for the big acronyms and probably choose to typethe easy material Consider this rule:CurRatioQ>CurRatioQIndTranslating to English, we’re looking for shares of companies whose current ratios are above their respective industry averages Point-and-click is the easiest way to enter CurRatioQ andCurRatioQInd You would then type the greater-than symbol, >Now consider something more complex, like a formula that replicates the Altman Z-Score and arule limiting consideration to companies whose scores are at least 2(12*((CurAstQ- CurLiabQ)/AstTotQ))+(14*((IncAftTaxTTM*(1-(PayRatioTTM/100)))/AstTotQ))+(33*(EBITTTM/AstTotQ))+(6*(MktCap/LiabTotQ))+(999*(SalesTTM/AstTotQ))>2Don’t panic if you do want to use Altman Z score, there is a much easier way to handle it,which you’ll learn in a later section on Custom FormulasBut for now, just think about how you’d input something like this It’s obvious you’d want to usepoint-and click for the data items and that you’d type the other things But with all thecomputations, it would be very easy to make a mess of this, especially as you try to correctlybalance the left and right parentheses This is a situation where you may want to use theinterface to build small parts of this rule, copy everything into Word or some other text editor, andpolish it up there before pasting the finished product back into StockScreen123 3