mlsanityData to 14 Oct 2026

FLAG-Trader: Fusion LLM-Agent with Gradient-based Reinforcement Learning for Financial Trading

arXiv 2502.11433 ↗First posted 17 Feb 2025cs.AI cs.CE q-fin.TRcited by 23

On the map: LLM reasoning → Reasoning for agents, planning and code

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Abstract (arXiv)

Large language models (LLMs) fine-tuned on multimodal financial data have demonstrated impressive reasoning capabilities in various financial tasks. However, they often struggle with multi-step, goal-oriented scenarios in interactive financial markets, such as trading, where complex agentic approaches are required to improve decision-making. To address this, we propose textscFLAG-Trader, a unified architecture integrating linguistic processing (via LLMs) with gradient-driven reinforcement learning (RL) policy optimization, in which a partially fine-tuned LLM acts as the policy network, leveraging pre-trained knowledge while adapting to the financial domain through parameter-efficient fine-tuning. Through policy gradient optimization driven by trading rewards, our framework not only enhances LLM performance in trading but also improves results on other financial-domain tasks. We present extensive empirical evidence to validate these enhancements.

Key facts. Cited by 23 papers in the map (data through 14 Oct 2026). Placed in Reasoning for agents, planning and code, one of 17 directions in LLM reasoning. Builds on 18 of its 41 references that are in the map. First posted on arXiv 17 Feb 2025.

Builds on

18 of 41 references.

References · 18

  1. 2021Decision Transformer: Reinforcement Learning via Sequence Modelingcited by 1,546
  2. 2023BloombergGPT: A Large Language Model for Financecited by 939
  3. 2019FinBERT: Financial Sentiment Analysis with Pre-trained Language Modelscited by 385
  4. 2023PIXIU: A Large Language Model, Instruction Data and Evaluation Benchmark for Financecited by 222
  5. 2023FinMem: A Performance-Enhanced LLM Trading Agent with Layered Memory and Character Designcited by 164
  6. 2020FinBERT: A Pretrained Language Model for Financial Communicationscited by 161
  7. 2024A Multimodal Foundation Agent for Financial Trading: Tool-Augmented, Diversified, and Generalistcited by 137
  8. 2022WHEN FLUE MEETS FLANG: Benchmarks and Large Pre-trained Language Model for Financial Domaincited by 117
  9. 2021Recent Advances in Reinforcement Learning in Financecited by 110
  10. 2023Large Language Models as Generalizable Policies for Embodied Taskscited by 86
  11. 2023InvestLM: A Large Language Model for Investment using Financial Domain Instruction Tuningcited by 82
  12. 2019Deep Reinforcement Learning for Tradingcited by 73
6 more
  1. 2021FinRL: Deep Reinforcement Learning Framework to Automate Trading in Quantitative Financecited by 58
  2. 2020Reinforcement-Learning based Portfolio Management with Augmented Asset Movement Prediction Statescited by 55
  3. 2018Practical Deep Reinforcement Learning Approach for Stock Tradingcited by 49
  4. 2022What do LLMs Know about Financial Markets? A Case Study on Reddit Market Sentiment Analysiscited by 27
  5. 2021Trading with the Momentum Transformer: An Intelligent and Interpretable Architecturecited by 16
  6. 2022FinBERT-MRC: financial named entity recognition using BERT under the machine reading comprehension paradigmcited by 8

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Citing papers per year: 2025: 12; 2026: 11.

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  1. 2026A Survey of Agent Memory in the Second Half: Towards Self-Evolving and Long-Horizon Agentscited by 44
  2. 2025Time Travel is Cheating: Going Live with DeepFund for Real-Time Fund Investment Benchmarkingcited by 21
  3. 2025When Agents Trade: Live Multi-Market Trading Benchmark for LLM Agentscited by 16
  4. 2025MultiFinBen: Benchmarking Large Language Models for Multilingual and Multimodal Financial Applicationcited by 14
  5. 2025LiveTradeBench: Seeking Real-World Alpha with Large Language Modelscited by 13
  6. 2025ATLAS: Adaptive Trading with LLM AgentS Through Dynamic Prompt Optimization and Multi-Agent Coordinationcited by 7
  7. 2025Genesis: Evolving Attack Strategies for LLM Web Agent Red-Teamingcited by 5
  8. 2026The Alpha Illusion: Reported Alpha from LLM Trading Agents Should Not Be Treated as Deployment Evidencecited by 3
  9. 2025TradeTrap: Are LLM-based Trading Agents Truly Reliable and Faithful?cited by 2
  10. 2026Design and Empirical Study of a Large Language Model-Based Multi-Agent Investment System for Chinese Public REITscited by 2
  11. 2025VORTEX: Aligning Task Utility and Human Preferences through LLM-Guided Reward Shapingcited by 1
  12. 2025Agent-Based Genetic Algorithm for Crypto Trading Strategy Optimizationcited by 1
11 more
  1. 2026Moira: Language-driven Hierarchical Reinforcement Learning for Pair Tradingcited by 1
  2. 2026GIFT: LLM-Guided State-Reward Interface for Financial Reinforcement Learningcited by 1
  3. 2026EvolveTrade: Experience-Driven Policy Refinement for Self-Evolving LLM Trading Agentscited by 1
  4. 2025News-Aware Direct Reinforcement Trading for Financial Marketscited by 0
  5. 2025LA-RL: Language Action-guided Reinforcement Learning with Safety Guarantees for Autonomous Highway Drivingcited by 0
  6. 2025MEEA: Mere Exposure Effect-Driven Confrontational Optimization for LLM Jailbreakingcited by 0
  7. 2026Hybrid LLM-based Intelligent Framework for Robot Task Schedulingcited by 0
  8. 2026AlgoEvolve: LLM-driven Meta-evolution of Algorithmic Trading Programscited by 0
  9. 2026SoK: Trading Agents or Market Crashers? Dissecting Robustness and Security Failures in Academic Financial LLM Trading Schemescited by 0
  10. 2026AlphaDiverse: Post-Training Local Quantitative Research Agents for Diverse Exploration in Alpha Factor Miningcited by 0
  11. 2026RICE-Alpha: Reliability-Informed Correction with Event Graphs for LLM-Agent Stock Forecastingcited by 0

Similar, not cited

Close in wording, no citation either way

  1. 2025Language Model Guided Reinforcement Learning in Quantitative Trading
  2. 2025Trading-R1: Financial Trading with LLM Reasoning via Reinforcement Learning
  3. 2026When Valid Signals Fail: Regime Boundaries Between LLM Features and RL Trading Policies
  4. 2025MountainLion: A Multi-Modal LLM-Based Agent System for Interpretable and Adaptive Financial Trading
  5. 2025LLMs Meet Finance: Fine-Tuning Foundation Models for the Open FinLLM Leaderboard
  6. 2025Exploring Sentiment Manipulation by LLM-Enabled Intelligent Trading Agents
  7. 2024Large Language Model Agent in Financial Trading: A Survey
  8. 2025Reasoning Like an Economist: Post-Training on Economic Problems Induces Strategic Generalization in LLMs