A key advancement in many quant models is the switch from digital to analog signals. What do we mean by the this? A digital signal is binary. It is either on or off. If the price is above a moving average, you go long. If the price is below the moving average, you go short. The decision is a switch. You can add more conditional switches but the basic model is still digital based on switching.
However, many models are switching to analog. There is no single on or off switch but a way of thinking that is more probabilistic. There is a greater probability from the model that it is time to move to long or short. Positions are scaled with likelihood. There is no one single answer but a view that it is more likely to switch. This is more of a Bayesian view for making decisions. An analog model will lead to a different form of trading because there is no single answer on what action to take.
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