mlsanityData to 14 Oct 2026

Trading-R1: Financial Trading with LLM Reasoning via Reinforcement Learning

arXiv 2509.11420 ↗First posted 14 Sep 2025q-fin.TR cs.AI cs.CEcited by 15

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

Abstract (arXiv)

Developing professional, structured reasoning on par with human financial analysts and traders remains a central challenge in AI for finance, where markets demand interpretability and trust. Traditional time-series models lack explainability, while LLMs face challenges in turning natural-language analysis into disciplined, executable trades. Although reasoning LLMs have advanced in step-by-step planning and verification, their application to risk-sensitive financial decisions is underexplored. We present Trading-R1, a financially-aware model that incorporates strategic thinking and planning for comprehensive thesis composition, facts-grounded analysis, and volatility-adjusted decision making. Trading-R1 aligns reasoning with trading principles through supervised fine-tuning and reinforcement learning with a three-stage easy-to-hard curriculum. Training uses Tauric-TR1-DB, a 100k-sample corpus spanning 18 months, 14 equities, and five heterogeneous financial data sources. Evaluated on six major equities and ETFs, Trading-R1 demonstrates improved risk-adjusted returns and lower drawdowns compared to both open-source and proprietary instruction-following models as well as reasoning models. The system generates structured, evidence-based investment theses that support disciplined and interpretable trading decisions. Trading-R1 Terminal will be released at https://github.com/TauricResearch/Trading-R1.

Key facts. Cited by 15 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 38 of its 54 references that are in the map. First posted on arXiv 14 Sep 2025.

Builds on

38 of 54 references.

Closest ancestors · 3

Same direction, newest first

  1. 2025Fin-R1: A Large Language Model for Financial Reasoning through Reinforcement Learning20 Mar
  2. 2025Fino1: On the Transferability of Reasoning-Enhanced LLMs and Reinforcement Learning to Finance12 Feb
  3. 2024OpenAI o1 System Card21 Dec

Other references · 35

  1. 2017Proximal Policy Optimization Algorithmscited by 15,215
  2. 2021LoRA: Low-Rank Adaptation of Large Language Modelscited by 14,380
  3. 2024DeepSeekMath: Pushing the Limits of Mathematical Reasoning in Open Language Modelscited by 9,379
  4. 2020Measuring Massive Multitask Language Understandingcited by 7,963
  5. 2025DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learningcited by 6,330
  6. 2022OPT: Open Pre-trained Transformer Language Modelscited by 3,512
  7. 2023Qwen Technical Reportcited by 3,344
  8. 2023MetaGPT: Meta Programming for A Multi-Agent Collaborative Frameworkcited by 1,808
  9. 2023MathVista: Evaluating Mathematical Reasoning of Foundation Models in Visual Contextscited by 1,614
  10. 2025gpt-oss-120b & gpt-oss-20b Model Cardcited by 1,386
  11. 2023BloombergGPT: A Large Language Model for Financecited by 939
  12. 2023Open Problems and Fundamental Limitations of Reinforcement Learning from Human Feedbackcited by 759
23 more
  1. 2024RewardBench: Evaluating Reward Models for Language Modelingcited by 499
  2. 2025Accelerating scientific discovery with Co-Scientistcited by 401
  3. 2023A Survey of Reinforcement Learning from Human Feedbackcited by 264
  4. 2023FinGPT: Open-Source Financial Large Language Modelscited by 253
  5. 2023PIXIU: A Large Language Model, Instruction Data and Evaluation Benchmark for Financecited by 222
  6. 2024TradingAgents: Multi-Agents LLM Financial Trading Frameworkcited by 188
  7. 2023FinMem: A Performance-Enhanced LLM Trading Agent with Layered Memory and Character Designcited by 164
  8. 2024A Multimodal Foundation Agent for Financial Trading: Tool-Augmented, Diversified, and Generalistcited by 137
  9. 2023Can ChatGPT Forecast Stock Price Movements? Return Predictability and Large Language Modelscited by 129
  10. 2023XuanYuan 2.0: A Large Chinese Financial Chat Model with Hundreds of Billions Parameterscited by 92
  11. 2023Towards Mitigating Hallucination in Large Language Models via Self-Reflectioncited by 81
  12. 2023BBT-Fin: Comprehensive Construction of Chinese Financial Domain Pre-trained Language Model, Corpus and Benchmarkcited by 60
  13. 2023Instruct-FinGPT: Financial Sentiment Analysis by Instruction Tuning of General-Purpose Large Language Modelscited by 58
  14. 2023Alpha-GPT: Human-AI Interactive Alpha Mining for Quantitative Investmentcited by 56
  15. 2024Designing Heterogeneous LLM Agents for Financial Sentiment Analysiscited by 48
  16. 2025PC-Agent: A Hierarchical Multi-Agent Collaboration Framework for Complex Task Automation on PCcited by 40
  17. 2024LLMFactor: Extracting Profitable Factors through Prompts for Explainable Stock Movement Predictioncited by 33
  18. 2024Can Large Language Models Beat Wall Street? Unveiling the Potential of AI in Stock Selectioncited by 29
  19. 2023Integrating Stock Features and Global Information via Large Language Models for Enhanced Stock Return Predictioncited by 17
  20. 2023Unveiling the Potential of Sentiment: Can Large Language Models Predict Chinese Stock Price Movements?cited by 15
  21. 2025Beyond the Black Box: Interpretability of LLMs in Financecited by 11
  22. 2022Long Short-Term Memory Neural Network for Financial Time Seriescited by 8
  23. 2024Deep Generative Modeling for Financial Time Series with Application in VaR: A Comparative Reviewcited by 7

Built on by

Cited by year (2026 to 14 Oct)

Citing papers per year: 2025: 2; 2026: 13.

15 papers.

Sort:

By area:

  1. 2025LiveTradeBench: Seeking Real-World Alpha with Large Language Modelscited by 13
  2. 2026SoK: Security of Autonomous LLM Agents in Agentic Commercecited by 8
  3. 2025Alpha-R1: Alpha Screening with LLM Reasoning via Reinforcement Learningcited by 7
  4. 2026Reward Modeling for Reinforcement Learning-Based LLM Reasoning: Design, Challenges, and Evaluationcited by 7
  5. 2026Agentic Trading: When LLM Agents Meet Financial Marketscited by 7
  6. 2026Trade-R1: Bridging Verifiable Rewards to Stochastic Environments via Process-Level Reasoning Verificationcited by 2
  7. 2026Design and Empirical Study of a Large Language Model-Based Multi-Agent Investment System for Chinese Public REITscited by 2
  8. 2026MEME: Modeling the Evolutionary Modes of Financial Marketscited by 2
  9. 2026A Review of Large Language Models for Stock Price Forecasting from a Hedge-Fund Perspectivecited by 2
  10. 2026FinanceHarness: Autonomous Financial Deep Research Frameworkcited by 2
  11. 2026Reasoning through Verifiable Forecast Actions: Consistency-Grounded RL for Financial LLMscited by 1
  12. 2026F-TIS: Harnessing Diverse Models in Collaborative GRPOcited by 1
3 more
  1. 2026UniFinEval: Towards Unified Evaluation of Financial Multimodal Models across Text, Images and Videoscited by 0
  2. 2026OrchMAS: Orchestrated Reasoning with Multi Collaborative Heterogeneous Scientific Expert Structured Agentscited by 0
  3. 2026Planning with Transformers: Chain of Computation and Structured Context Windowscited by 0

Similar, not cited

Close in wording, no citation either way

  1. 2026Learning to Trade Like an Expert: Cognitive Fine-Tuning for Stable Financial Reasoning in Language Models
  2. 2025Language Model Guided Reinforcement Learning in Quantitative Trading
  3. 2025FLAG-Trader: Fusion LLM-Agent with Gradient-based Reinforcement Learning for Financial Trading
  4. 2024Reinforcement Learning Framework for Quantitative Trading
  5. 2026From Knowing to Doing: A Memory-Controlled Benchmark for LLM Trading Agents on Stock Markets
  6. 2025Agent Trading Arena: A Study on Numerical Understanding in LLM-Based Agents
  7. 2026The Price of Thought: Does Test-Time Reasoning Pay in LLM Trading?
  8. 2024The Evolution of Reinforcement Learning in Quantitative Finance: A Survey