Trading signals are recommendations delivered by traders or generated by trading systems or indicators. These trading signals could be classified into four categories:
Buy signals are recommendations to buy a particular asset.
Sell signals are recommendations to sell a particular asset.
Short signals are recommendations to short a particular asset. To short a stock means to sell a stock that you do not own.
Cover signals are recommendation to buy-back a shorted asset.
Example of trading signals generated by a technical analysis indicator:
The Relative Strength Index generates a buy signal when it is in an oversold area and it generates a sell signal when it is in an overbought area.