mlsanityData to 14 Oct 2026

Trade-R1: Bridging Verifiable Rewards to Stochastic Environments via Process-Level Reasoning Verification

arXiv 2601.03948 ↗First posted 7 Jan 2026cs.AI q-fin.TRcited by 2

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

Abstract (arXiv)

Reinforcement Learning (RL) has enabled Large Language Models (LLMs) to achieve remarkable reasoning in domains like mathematics and coding, where verifiable rewards provide clear signals. However, extending this paradigm to financial decision is challenged by the market's stochastic nature: rewards are verifiable but inherently noisy, causing standard RL to degenerate into reward hacking. To address this, we propose Trade-R1, a model training framework that bridges verifiable rewards to stochastic environments via process-level reasoning verification. Our key innovation is a verification method that transforms the problem of evaluating reasoning over lengthy financial documents into a structured Retrieval-Augmented Generation (RAG) task. We construct a triangular consistency metric, assessing pairwise alignment between retrieved evidence, reasoning chains, and decisions to serve as a validity filter for noisy market returns. We explore two reward integration strategies: Fixed-effect Semantic Reward (FSR) for stable alignment signals, and Dynamic-effect Semantic Reward (DSR) for coupled magnitude optimization. Experiments on different country asset selection demonstrate that our paradigm reduces reward hacking, with DSR achieving superior cross-market generalization while maintaining the highest reasoning consistency.

Key facts. Cited by 2 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 10 of its 18 references that are in the map. First posted on arXiv 7 Jan 2026.

Builds on

10 of 18 references.

Closest ancestors · 1

Same direction, newest first

  1. 2025Trading-R1: Financial Trading with LLM Reasoning via Reinforcement Learning14 Sep

Other references · 9

  1. 2023Let's Verify Step by Stepcited by 3,789
  2. 2023Code Llama: Open Foundation Models for Codecited by 2,139
  3. 2023The Rise and Potential of Large Language Model Based Agents: A Surveycited by 1,439
  4. 2022Solving math word problems with process- and outcome-based feedbackcited by 901
  5. 2023FinGPT: Open-Source Financial Large Language Modelscited by 253
  6. 2018Categorizing Variants of Goodhart's Lawcited by 149
  7. 2024Scaling Laws for Reward Model Overoptimization in Direct Alignment Algorithmscited by 143
  8. 2020FinRL: A Deep Reinforcement Learning Library for Automated Stock Trading in Quantitative Financecited by 87
  9. 2025FinDPO: Financial Sentiment Analysis for Algorithmic Trading through Preference Optimization of LLMscited by 4

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Cited by year (2026 to 14 Oct)

Citing papers per year: 2026: 2.

2 papers.

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Close in wording, no citation either way

  1. 2025DianJin-R1: Evaluating and Enhancing Financial Reasoning in Large Language Models
  2. 2026Mitigating Hallucination in Financial Retrieval-Augmented Generation via Fine-Grained Knowledge Verification
  3. 2026Learning to Trade Like an Expert: Cognitive Fine-Tuning for Stable Financial Reasoning in Language Models
  4. 2026Moira: Language-driven Hierarchical Reinforcement Learning for Pair Trading
  5. 2024Robot See, Robot Do: Imitation Reward for Noisy Financial Environments
  6. 2025The Climb Carves Wisdom Deeper Than the Summit: On the Noisy Rewards in Learning to Reason
  7. 2025Fin-PRM: A Domain-Specialized Process Reward Model for Financial Reasoning in Large Language Models
  8. 2025Fin-R1: A Large Language Model for Financial Reasoning through Reinforcement Learning