Questions about CMLViz Trade Machine (Part 1)

I recently saw a 2019 presentation on CMLViz Trade Machine PRO (TM) given by Ophir Gottlieb. The presentation is compelling, but I am not yet sold on this as my first automated backtester. Please excuse me in advance for the laundry list of questions, suggestions, and discussion that is to follow. More than anything else, I just want clarification about what the product offers and what its limitations are.

The presentation is ~75 minutes long and filled with examples that answer many questions. The backtest results are impressive, but I know better by now than to take impressive results at face value without establishing proper validation.

TM comes with a few technical analysis (TA) filters built-in. One viewer asked if this would be expanded. Gottlieb said the reason more TA indicators have not been added is because additional edge has not been found. While he will be looking to add, his criteria to do so are stringent. I found this answer to be very consistent with some of my writing on the subject.

As Gottlieb presents one technical setup I find very encouraging, I wondered whether customization is possible as discussed in the fifth paragraph here. A later screenshot shows this to be the case. Unfortunately, I don’t see that TA can be used for exits.

I wondered whether slippage and commissions are customizable. Slippage has three settings [none, market (natural pricing), or halfway between the two], which is acceptable. Ideally, I would like to also be able to customize slippage as a percentage and/or have dynamic slippage that increases with market speed. Commissions are customizable.

Although some examples showed impressive results, it’s unclear what the monthly fee includes. TM and CML Stock Research PRO are two separate products. The former includes some scans and write-ups, but the latter offers much more research. Gottlieb seems to have taken ideas from the latter as backtesting examples for this presentation, which deceptively makes TM seem more powerful than it actually is. I personally think Research PRO should be included for as much as TM costs.

Small sample sizes in the presentation limit generalizability of results that would otherwise be more meaningful. Many backtests were single stocks with few trades. No backtest of a single stock earnings trade over the last 2-3 years will ever qualify as a large sample size. Filtering entries to further cut down the number of trades is less than impressive.

Whether I can backtest the same strategy on a basket of stocks to increase sample size is discussed here. Part of me believes different people trade different stocks and drivers of one stock will not be drivers of another. Then again, perhaps the biggest money managers trade them all. Alternatively, if all stocks are in the S&P 500, then perhaps all overriding stock movements are dictated by traders of the index in the form of /ES or other tracking ETFs. Avoiding assumption is probably best practice.

I will continue next time.