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With the fast development of quantitative portfolio optimization in financial engineering, lots of AI-based algorithmic trading strategies have demonstrated promising results, among which reinforcement learning begins to manifest…

Mathematical Finance · Quantitative Finance 2023-03-10 Huifang Huang , Ting Gao , Pengbo Li , Jin Guo , Peng Zhang , Nan Du

Optimal execution is a sequential decision-making problem for cost-saving in algorithmic trading. Studies have found that reinforcement learning (RL) can help decide the order-splitting sizes. However, a problem remains unsolved: how to…

Trading and Market Microstructure · Quantitative Finance 2022-07-25 Feiyang Pan , Tongzhe Zhang , Ling Luo , Jia He , Shuoling Liu

This scientific research paper presents an innovative approach based on deep reinforcement learning (DRL) to solve the algorithmic trading problem of determining the optimal trading position at any point in time during a trading activity in…

Trading and Market Microstructure · Quantitative Finance 2022-06-06 Thibaut Théate , Damien Ernst

Quantitative markets are characterized by swift dynamics and abundant uncertainties, making the pursuit of profit-driven stock trading actions inherently challenging. Within this context, reinforcement learning (RL), which operates on a…

Trading and Market Microstructure · Quantitative Finance 2023-12-25 Hengxi Zhang , Zhendong Shi , Yuanquan Hu , Wenbo Ding , Ercan E. Kuruoglu , Xiao-Ping Zhang

Reinforcement learning (RL) has emerged as a powerful paradigm for solving decision-making problems in dynamic environments. In this research, we explore the application of Double DQN (DDQN) and Dueling Network Architectures, to financial…

Machine Learning · Computer Science 2025-04-17 Bruno Giorgio

Portfolio management is the art and science in fiance that concerns continuous reallocation of funds and assets across financial instruments to meet the desired returns to risk profile. Deep reinforcement learning (RL) has gained increasing…

Portfolio Management · Quantitative Finance 2023-10-30 Yinheng Li , Junhao Wang , Yijie Cao

In recent years, a wide range of investment models have been created using artificial intelligence. Automatic trading by artificial intelligence can expand the range of trading methods, such as by conferring the ability to operate 24 hours…

Trading and Market Microstructure · Quantitative Finance 2021-12-17 Koya Ishikawa , Kazuhide Nakata

Financial domain tasks, such as trading in market exchanges, are challenging and have long attracted researchers. The recent achievements and the consequent notoriety of Reinforcement Learning (RL) have also increased its adoption in…

Transmission expansion planning in electricity markets is tightly coupled with the strategic bidding behaviors of generation companies. This paper proposes a Reinforcement Learning (RL)-based co-optimization framework that simultaneously…

Systems and Control · Electrical Eng. & Systems 2026-02-24 Tomonari Kanazawa , Hikaru Hoshino , Eiko Furutani

We employ deep reinforcement learning (RL) to train an agent to successfully translate a high-frequency trading signal into a trading strategy that places individual limit orders. Based on the ABIDES limit order book simulator, we build a…

Trading and Market Microstructure · Quantitative Finance 2023-09-27 Peer Nagy , Jan-Peter Calliess , Stefan Zohren

With Reinforcement Learning (RL) for inventory management (IM) being a nascent field of research, approaches tend to be limited to simple, linear environments with implementations that are minor modifications of off-the-shelf RL algorithms.…

Machine Learning · Computer Science 2023-04-19 Madhav Khirwar , Karthik S. Gurumoorthy , Ankit Ajit Jain , Shantala Manchenahally

In this paper, reinforcement learning is applied to the problem of optimizing market making. A multi-agent reinforcement learning framework is used to optimally place limit orders that lead to successful trades. The framework consists of…

Trading and Market Microstructure · Quantitative Finance 2018-12-27 Yagna Patel

This research focuses on enhancing reinforcement learning (RL) algorithms by integrating penalty functions to guide agents in avoiding unwanted actions while optimizing rewards. The goal is to improve the learning process by ensuring that…

Machine Learning · Computer Science 2025-04-07 Sai Gana Sandeep Pula , Sathish A. P. Kumar , Sumit Jha , Arvind Ramanathan

Reinforcement learning agents are prone to undesired behaviors due to reward mis-specification. Finding a set of reward functions to properly guide agent behaviors is particularly challenging in multi-agent scenarios. Inverse reinforcement…

Machine Learning · Computer Science 2019-08-01 Lantao Yu , Jiaming Song , Stefano Ermon

The realm of High-Frequency Trading (HFT) is characterized by rapid decision-making processes that capitalize on fleeting market inefficiencies. As the financial markets become increasingly competitive, there is a pressing need for…

Trading and Market Microstructure · Quantitative Finance 2023-11-21 Soumyadip Sarkar

Although pair trading is the simplest hedging strategy for an investor to eliminate market risk, it is still a great challenge for reinforcement learning (RL) methods to perform pair trading as human expertise. It requires RL methods to…

Computational Finance · Quantitative Finance 2023-04-04 Weiguang Han , Jimin Huang , Qianqian Xie , Boyi Zhang , Yanzhao Lai , Min Peng

Financial markets are influenced by human behavior that deviates from rationality due to cognitive biases. Traditional reinforcement learning (RL) models for financial decision-making assume rational agents, potentially overlooking the…

Machine Learning · Computer Science 2026-01-14 Liu He

We suggest a simple practical method to combine the human and artificial intelligence to both learn best investment practices of fund managers, and provide recommendations to improve them. Our approach is based on a combination of Inverse…

Machine Learning · Computer Science 2022-01-07 Igor Halperin , Jiayu Liu , Xiao Zhang

With the increasing power of computers and the rapid development of self-learning methodologies such as machine learning and artificial intelligence, the problem of constructing an automatic Financial Trading Systems (FTFs) becomes an…

Trading and Market Microstructure · Quantitative Finance 2019-08-29 Haoqian Li , Thomas Lau

Federated learning (FL) is a paradigm where many clients collaboratively train a model under the coordination of a central server, while keeping the training data locally stored. However, heterogeneous data distributions over different…

Machine Learning · Computer Science 2022-05-27 Yaqi Sun , Shijing Si , Jianzong Wang , Yuhan Dong , Zhitao Zhu , Jing Xiao