Over the past 25 years, Raymond Rondeau has designed well over one hundred tools and indicators to assist investors. In fact, a large portion of AAII’s Active Investing area is now dedicated to the development of these tools for the purpose of assisting investors with education, simplifying calculations, research, analysis, scanning, charting, executions and strategies.
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AAII is not a registered investment adviser or a broker/dealer. Readers are advised that articles are provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities. The opinions and analyses included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness or correctness. Read More.
Essential Investing (EI) Tools
Listed below are a few of the tools that Rondeau has developed that now appear on top investment platforms like TradeStation and MetaStock.
For more information on appearances or accessing, customizing and applying these tools, contact Rondeau directly at rrondeau@aaii.com.
Over the past 25 years, Rondeau has designed well over one hundred tools and indicators to assist investors.
In fact, a large portion of AAII’s Active Investing area is now dedicated to the development of these tools for the purpose of assisting investors with education, simplifying calculations, research, analysis, scanning, charting, executions and strategies.
Check out Some of Our Current Essential Investing Tools
Rondeau’s Reversion
Rondeau’s Reversion is an analysis and short-term timing-based indicator. This indicator is plotted directly on a price chart similar to other common moving averages or band-like indicators. But this is where the similarities end as Rondeau’s Reversion incorporates price, volatility and volume into the plotting of the bands.
By incorporating volume, higher intensity moves are given more emphasis on the band displacements while maintaining simple-to-interpret buy-and-sell target execution areas. In addition, because securities often move up and down differently, up-and-down values are calculated separately, resulting in offset bands that better represent the true characteristics of the price movement issues.
Lastly, Rondeau’s reversions include a scaled intensity factor (0 – 100) and detailed commentary reports showing key statistics along with easy-to-read written guidance and assessments.
AAII’s PROVE (Position Ratio Optimizing Volatility Engine)
AAII’s PROVE is an investment tool that can assist investors with proper position sizing. This tool provides investors with a simple and effective means for dollar and share amount determination of a security. The tool’s function is to balance multiple positions, so that they have an equal and similar projected end effect on the position’s stock portfolio based on historic volatility measurements. PROVE calculates these amounts using a combination of common volatility-based measurements from a downside “risk” perspective only.
PROVE not only provides guidance at the time of entry, but it can also monitor these positions daily, displaying the current associated daily risk and the number of shares that the investor should add or sell to bring each position back in line with the investor’s desired level of risk and other positions in their stock portfolio.
AAII’s Order Assistant
AAII’s Order Assistant is a tool that is designed to assist investors with order placement selections and setting execution prices. With default values or easily customizable inputs, the Order Assistant tool shows investors the possible slippage that they could realize based on a variety of order types and prices. Factors that are included in these calculations include projected slippage on a targeted number of shares and commissions.
By constantly monitoring the bid-ask spread (real-time data required), the tool will constantly adjust the order type and pricing guidance based on each investor’s cost thresholds. Constant monitoring and prices are provided for improve, hit, take, mid, probable and likely designations. Lastly, the tool includes an exhaustive list of standard reference fields such as bid-ask prices, trade directions, order exchanges, order sizes and order times.
AAII’s Security Profiler
It is no secret that investors focus a large amount of their time and efforts on what securities to invest in. Unfortunately, during this same process, some investors neglect to check the equally (if not more) important other side of what NOT to invest in. Because of this, AAII has developed AAII’s Security Profiler.
This tool evaluates and highlights 12 different non-fundamental-based investment areas and then grades each security according to these studies. Evaluations can be based on either default or each investor’s specific parameters and include areas such as spread cost, price levels, volatility, gapping tendencies, dividend amounts and timing, option timing and activity, and liquidity.
AAII’s Security Movement Characteristics Tracker
AAII’s Movement Tracker provides investors with a historical perspective of a security’s movement characteristics. Values include how often (by percentage) a security closes up and down, the average amount a security finishes up and down, and maximum and minimum amounts a security has finished up or down in various time periods.
Similar statistics are also provided on how often a security opens up or down, how much of a security’s total returns are attributable to regular session and overnight movements and comprehensive statistics on gapping tendencies and gap sustainability.
AAII’s Kinetic Conviction
AAII’s Kinetic Conviction (KC) is a next-generation volume-based indicator that is plotted like standard volume bars in a lower chart pane but with some very important differences and distinct advantages. KC has been designed to read, interpret and display a more accurate representation of the amount of conviction behind and/or with an associated price move by factoring volume, price and volatility all in one indicator.
KC’s primary focus is to assist investors with recognizing important volume/conviction-related events by displaying conviction differentials from its exponential means. KC includes detailed commentary reports showing statistics and easy-to-read written guidance and assessments for those new to this type of analysis. Lastly, KC also has a strategy plug-in for highlighting these events and their associated execution areas right on the chart, along with scanning capabilities and generated execution performance reports for each security.
AAII’s Optimized Balance Conviction
AAII’s Optimized Balance Conviction (OBC) is a volume-based indicator that is plotted as a single line on a chart to assist investors with determining if a trend is likely to continue or reverse. OBC’s readings are derived from an intricate interaction of price returns and the associated up versus down volume of those returns. OBC attempts to display a more accurate representation of up and down price volume than older first-generation studies and methods by factoring in both volume and the magnitude of the associated price move.
OBC also provides detailed commentary reports showing statistics and easy-to-read written guidance and assessments to help identify important but often hard-to-spot key divergences.
