In market timing, a signal is any indicator reading or set of conditions that a strategy uses to trigger an action — buy, sell, reduce exposure, or hold. Signals can be generated by technical indicators (a moving average crossover, an RSI threshold), fundamental conditions (earnings yield vs. bond yield), or sentiment gauges (a Fear and Greed extreme).
Every signal has a reliability profile: a hit rate (how often the implied trade is profitable), a magnitude profile (how large the wins and losses typically are), and a regime dependency (the conditions under which it tends to work versus fail). A signal that works in trending markets often fails in range-bound ones; a signal calibrated to one time period may perform differently in another.
The critical discipline is not treating any single signal as definitive. Combining multiple signals from different methodological families — trend, momentum, breadth, sentiment — and requiring confirmation before acting reduces both the false positive rate and the emotional confidence in any one reading. "Signal" and "certainty" are not synonyms in market timing.