What is the most efficient way to farm squid?
The key to making squid spawn is elevation. From the Minecraft Wiki:
Squids spawn in water between layers 46 and sea level (64), in groups of up to 4. After the world generation, they may still spawn in individuals and will only spawn in rivers, beach variants and ocean biomes.
So your aquarium must be below sea level and in one of the mentioned biomes. It can be made entirely of falling water, so a convenient design is to make a chamber of falling water that stops above a sign platform, leave an airspace to suffocate the squid, then have a sheet of flowing water under that pushes the dying squid and ink to a hopper (or your AFK self).
To my knowledge (and experience), you can farm squid by having an aquarium. I had a 4*4*4 farm, which basically:
- Spawned squid occasionally
- Forced squid into small 1*2*1 hole
- Killed with pistons and a redstone clock or by punching (no need to waste sword durability on this).