# SHARP: A Self-Evolving Human-Auditable Rubric Policy for Financial Trading Agents

arXiv: https://arxiv.org/abs/2605.06822 · HTML: https://mlsanity.com/paper/2605.06822/

## Key facts

- Cited by 4 papers in the map (data through 14 Oct 2026).
- Placed in Financial trading and forecasting agents, one of 16 directions in LLM agents and tool use.
- Builds on 23 of its 30 references that are in the map.
- First posted on arXiv 7 May 2026.

## Placed in

- LLM agents and tool use / [Financial trading and forecasting agents](https://mlsanity.com/agents/financial-trading-and-forecasting-agents/)
- Synthetic data and self-improvement for LLMs / [Self-evolving LLM agents](https://mlsanity.com/synth/self-evolving-llm-agents/)

## Builds on (most cited first, 23 of 23)

- [The Llama 3 Herd of Models](https://mlsanity.com/paper/2407.21783/) (2024)
- [DeepSeekMath: Pushing the Limits of Mathematical Reasoning in Open Language Models](https://mlsanity.com/paper/2402.03300/) (2024)
- [GPT-4o System Card](https://mlsanity.com/paper/2410.21276/) (2024)
- [Large Language Models as Optimizers](https://mlsanity.com/paper/2309.03409/) (2023)
- [GEPA: Reflective Prompt Evolution Can Outperform Reinforcement Learning](https://mlsanity.com/paper/2507.19457/) (2025)
- [Rubrics as Rewards: Reinforcement Learning Beyond Verifiable Domains](https://mlsanity.com/paper/2507.17746/) (2025)
- [Optimizing Instructions and Demonstrations for Multi-Stage Language Model Programs](https://mlsanity.com/paper/2406.11695/) (2024)
- [AIDE: AI-Driven Exploration in the Space of Code](https://mlsanity.com/paper/2502.13138/) (2025)
- [FinMem: A Performance-Enhanced LLM Trading Agent with Layered Memory and Character Design](https://mlsanity.com/paper/2311.13743/) (2023)
- [A Multimodal Foundation Agent for Financial Trading: Tool-Augmented, Diversified, and Generalist](https://mlsanity.com/paper/2402.18485/) (2024)
- [Can ChatGPT Forecast Stock Price Movements? Return Predictability and Large Language Models](https://mlsanity.com/paper/2304.07619/) (2023)
- [FinCon: A Synthesized LLM Multi-Agent System with Conceptual Verbal Reinforcement for Enhanced Financial Decision Making](https://mlsanity.com/paper/2407.06567/) (2024)
- [Reinforcement Learning with Rubric Anchors](https://mlsanity.com/paper/2508.12790/) (2025)
- [Rethinking Rubric Generation for Improving LLM Judge and Reward Modeling for Open-ended Tasks](https://mlsanity.com/paper/2602.05125/) (2026)
- [R&D-Agent-Quant: A Multi-Agent Framework for Data-Centric Factors and Model Joint Optimization](https://mlsanity.com/paper/2505.15155/) (2025)
- [AlphaAgent: LLM-Driven Alpha Mining with Regularized Exploration to Counteract Alpha Decay](https://mlsanity.com/paper/2502.16789/) (2025)
- [Auto-Rubric: Learning From Implicit Weights to Explicit Rubrics for Reward Modeling](https://mlsanity.com/paper/2510.17314/) (2025)
- [MarketSenseAI 2.0: Enhancing Stock Analysis through LLM Agents](https://mlsanity.com/paper/2502.00415/) (2025)
- [QuantaAlpha: An Evolutionary Framework for LLM-Driven Alpha Mining](https://mlsanity.com/paper/2602.07085/) (2026)
- [ATLAS: Adaptive Trading with LLM AgentS Through Dynamic Prompt Optimization and Multi-Agent Coordination](https://mlsanity.com/paper/2510.15949/) (2025)
- [FinHEAR: Human Expertise and Adaptive Risk-Aware Temporal Reasoning for Financial Decision-Making](https://mlsanity.com/paper/2506.09080/) (2025)
- [AlphaLab: Autonomous Multi-Agent Research Across Optimization Domains with Frontier LLMs](https://mlsanity.com/paper/2604.08590/) (2026)
- [MountainLion: A Multi-Modal LLM-Based Agent System for Interpretable and Adaptive Financial Trading](https://mlsanity.com/paper/2507.20474/) (2025)

## Built on by (most cited first, 4 of 4)

- [Recursive Self-Improvement in AI: From Bounded Self-Refinement to Autonomous Research Loops](https://mlsanity.com/paper/2607.07663/) (2026)
- [Agentic Trading: When LLM Agents Meet Financial Markets](https://mlsanity.com/paper/2605.19337/) (2026)
- [EvolveTrade: Experience-Driven Policy Refinement for Self-Evolving LLM Trading Agents](https://mlsanity.com/paper/2609.17632/) (2026)
- [Agentic Empirical Asset Pricing: Methodological Foundations](https://mlsanity.com/paper/2609.00731/) (2026)

## Abstract (arXiv)

Large language models (LLMs) are increasingly deployed for autonomous financial trading, a domain requiring continuous adaptation to noisy, non-stationary markets. Existing self-improving agents typically address this through unbounded free-form prompt optimization. However, in low signal-to-noise environments with delayed scalar rewards (P&L), this unstructured approach exacerbates the fundamental credit assignment problem: optimizers cannot reliably distinguish systematic logic flaws from stochastic market variance, inevitably leading to policy drift. To overcome this bottleneck, we introduce the Self-Evolving Human-Auditable Rubric Policy (SHARP), a neuro-symbolic framework that replaces unconstrained text mutation with structured, symbolic policy optimization. SHARP confines the agent's reasoning to a bounded, human-readable rubric of explicit condition-action rules. When sub-optimal trades occur, an attribution agent employs cross-sample reasoning across multiple samples to isolate specific rule failures. This enables targeted, atomic policy edits that are subsequently regularized through strict walk-forward validation. Evaluated across three diverse equity sectors and four LLM backbones, SHARP consistently transforms generic initial heuristics into highly robust strategies, lifting the empirical performance of compact models by 10 to 20 percentage points on average (e.g., GPT-4o-mini). Ultimately, SHARP demonstrates that LLMs can achieve dynamic and efficient adaptation while significantly enhancing the structural transparency and auditability demanded by institutional finance.