The mechanism that converts market data and algorithm logic into discrete buy/sell triggers. Essentially, it’s how the robot “sees” an opportunity. Signal generation can be based on technical indicators (e.g. an RSI extreme or MACD crossover), statistical models (e.g. regression forecasts), or outputs from an ML model. For example, a common signal is the moving-average crossover: “a buy signal occurs when the short-term moving average crosses above the long-term average, and a sell signal when it crosses below”. Once generated, signals feed into execution and risk modules to actually place or exit trades.

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