Beginners ask about the "right" way to build signals, as if there is one canonical answer that separates the professionals from the amateurs. There isn't. But there IS a framework that I think is genuinely useful, and it would have saved me months of getting confused between "signals", "alphas", "forecasts" and "predictions". They're all overloaded and can represent each other and they might mean different things at different places, even with the same name.
All The Forms A Signal Can Take
Beginners ask about the "right" way to build signals, as if there is one canonical answer that separates the professionals from the amateurs. There isn't. But there IS a framework that I think is genuinely useful, and it would have saved me months of getting confused between "signals", "alphas", "forecasts" and "predictions". They're all overloaded and can represent each other and they might mean different things at different places, even with the same name.