Stock screeners--either web-based or standalone--are indispensable tools for today's active stock trader. Stock screeners help traders quickly scan the entire market for stocks that have just the characteristics he or she is looking for, producing potential trading opportunities in mere seconds.

The advantages of stock screeners are tremendous. Back in the old days of the late 1980's, when I started trading, stock screening was a very labor intensive undertaking. Traders would pour through newspaper stock tables, struggle with FM radio wave based real time quote machines, and chart by hand on special graph paper. We would be forced to only look at a few stocks at a time, a sector if we were lucky, hoping to stumble upon a stock that fit the criteria at the time. But what once took hours and even days now can be done in an instant thanks to stock screening software.

Stock screeners provide today's stock trader the ability to shift through 1000's of stocks searching for exact criteria. Growth stocks. Value stocks. Earnings Growth. Price to Sales. Breakouts. Pullbacks. Whatever a trader thinks is an important characteristic for a stock to have, stock screeners will find the stocks that fit.

Let's look at the different types of stock screeners. I'll provide several examples of actual stock screeners you can use today. Lastly, I'll explain how to how to use a screener for the best results.

Stock Screen Machines

These marvels of computer power and internet technology obviously cost a small fortune to utilize, right? Wrong! The most amazing thing is many of stock screeners are free to use.

The two primary types of screeners are based on fundamental or technical data analysis. Both of these types of screener can be available as either a real time intraday screener and or end of day. The freely available stock screeners generally fall into the fundamental, end-of-day category, although a few screeners have some technical criteria included. The following is a brief overview of five, freely available Internet-based screeners that you can try.

The AOL Money screener, is very basic with pre-set criteria and some unique touches like "stocks set to double earnings".

The Dow Jones Market Watch stock screener includes fundamentals and a brief technical section with a moving average filter.

MSN Money stock screener includes the basic fundamental criteria plus the added bonus of determining if the stock is part of a major stock index.

Finally, Morningstar provides an interesting product that screens and assigns a number rank to the results. You can check out this screener for yourself.

The classic free technically based end of day screener is provided by stockcharts.com. It specializes in locating stocks that are exhibiting bullish technical behavior and is really easy to use.

On the other side of the stock screening spectrum are screeners that are based strictly on technical criteria and operate intraday in real time. Trade-ideas.com is the industry standard in this space. It's not free but well worth the cost in my opinion. Unlike the free stock screeners, the Trade Ideas stock screener searches in real time for numerous technical criteria. Here is a screen shot of it in action:

How should you use a screener? I will focus on the free fundamental screeners mentioned earlier in this example.

One way to start is to locate undervalued stocks that are ready to quickly increase in value. Here are some of the criteria you might include in your screen:

Low PE Ratios

Low debt to equity ratio

High profit margins

Stock pays dividends

High revenue growth

Once a list of stocks is developed from these basic criteria, look at each of the stocks on a price chart. Look for trends, bottoming patterns or formations and other bullish signals.

Stock screeners are a must for today's active stock trader. Many screeners are available for free. However, the real-time, intraday screeners normally require a small fee.

Use the free screeners to search for stocks that are fundamentally sound using criteria like those above. After you have a list of candidates, drill down deeper by applying technical analysis to produce stocks for your daily watch list. The most important thing is to make sure the technicals and fundamentals are both positive prior to buying a stock.

Fortunately, although many stock screeners tend to be either fundamental or technical in nature, there are several available that will allow you to screen stocks using both fundamental and technical criteria. The most important thing is to make sure the technical and fundamental criteria are both positive before buying a stock. So be sure to screen stocks for both.

Dave Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.