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Inspired by the developments in deep generative models, we propose a model-based RL approach, coined Reinforced Deep Markov Model (RDMM), designed to integrate desirable properties of a reinforcement learning algorithm acting as an…

Trading and Market Microstructure · Quantitative Finance 2020-11-10 Tadeu A. Ferreira

This study investigates the development of an optimal execution strategy through reinforcement learning, aiming to determine the most effective approach for traders to buy and sell inventory within a finite time horizon. Our proposed model…

Trading and Market Microstructure · Quantitative Finance 2025-11-04 Yadh Hafsi , Edoardo Vittori

In this paper, we introduce a novel reinforcement learning framework for optimal trade execution in a limit order book. We formulate the trade execution problem as a dynamic allocation task whose objective is the optimal placement of market…

Trading and Market Microstructure · Quantitative Finance 2026-01-28 Patrick Cheridito , Moritz Weiss

This study develops and evaluates a deep reinforcement learning framework for dynamic portfolio allocation across global equity markets. The Soft Actor-Critic algorithm is used to learn continuous portfolio weights within a Markov Decision…

Portfolio Management · Quantitative Finance 2026-05-19 Kamil Kashif , Robert Ślepaczuk

Stock trading strategies play a critical role in investment. However, it is challenging to design a profitable strategy in a complex and dynamic stock market. In this paper, we propose an ensemble strategy that employs deep reinforcement…

Trading and Market Microstructure · Quantitative Finance 2025-11-18 Hongyang Yang , Xiao-Yang Liu , Shan Zhong , Anwar Walid

Reinforcement learning (RL) is an innovative approach to financial decision making, offering specialized solutions to complex investment problems where traditional methods fail. This review analyzes 167 articles from 2017--2025, focusing on…

Computational Finance · Quantitative Finance 2025-12-12 Mohammad Rezoanul Hoque , Md Meftahul Ferdaus , M. Kabir Hassan

Execution algorithms are vital to modern trading, they enable market participants to execute large orders while minimising market impact and transaction costs. As these algorithms grow more sophisticated, optimising them becomes…

Computational Finance · Quantitative Finance 2025-10-28 Ollie Olby , Andreea Bacalum , Rory Baggott , Namid Stillman

We introduce the use of reinforcement learning for indirect mechanisms, working with the existing class of sequential price mechanisms, which generalizes both serial dictatorship and posted price mechanisms and essentially characterizes all…

Computer Science and Game Theory · Computer Science 2021-05-07 Gianluca Brero , Alon Eden , Matthias Gerstgrasser , David C. Parkes , Duncan Rheingans-Yoo

Market making is a fundamental trading problem in which an agent provides liquidity by continually offering to buy and sell a security. The problem is challenging due to inventory risk, the risk of accumulating an unfavourable position and…

Artificial Intelligence · Computer Science 2018-04-13 Thomas Spooner , John Fearnley , Rahul Savani , Andreas Koukorinis

Algorithmic stock trading has become a staple in today's financial market, the majority of trades being now fully automated. Deep Reinforcement Learning (DRL) agents proved to be to a force to be reckon with in many complex games like Chess…

Machine Learning · Computer Science 2021-06-02 Tidor-Vlad Pricope

We explore online inductive transfer learning, with a feature representation transfer from a radial basis function network formed of Gaussian mixture model hidden processing units to a direct, recurrent reinforcement learning agent. This…

Trading and Market Microstructure · Quantitative Finance 2022-05-24 Gabriel Borrageiro , Nick Firoozye , Paolo Barucca

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

Generating asset-specific trading signals based on the financial conditions of the assets is one of the challenging problems in automated trading. Various asset trading rules are proposed experimentally based on different technical analysis…

Artificial Intelligence · Computer Science 2020-10-28 Mehran Taghian , Ahmad Asadi , Reza Safabakhsh

Financial trading has been widely analyzed for decades with market participants and academics always looking for advanced methods to improve trading performance. Deep reinforcement learning (DRL), a recently reinvigorated method with…

Trading and Market Microstructure · Quantitative Finance 2021-06-17 Ali Hirsa , Joerg Osterrieder , Branka Hadji-Misheva , Jan-Alexander Posth

The inherent volatility and dynamic fluctuations within the financial stock market underscore the necessity for investors to employ a comprehensive and reliable approach that integrates risk management strategies, market trends, and the…

Trading and Market Microstructure · Quantitative Finance 2024-11-13 Alhassan S. Yasin , Prabdeep S. Gill

Reinforcement learning is a machine learning approach concerned with solving dynamic optimization problems in an almost model-free way by maximizing a reward function in state and action spaces. This property makes it an exciting area of…

Portfolio Management · Quantitative Finance 2020-10-12 Miquel Noguer i Alonso , Sonam Srivastava

In this thesis, we develop a comprehensive account of the expressive power, modelling efficiency, and performance advantages of so-called trading agents (i.e., Deep Soft Recurrent Q-Network (DSRQN) and Mixture of Score Machines (MSM)),…

Portfolio Management · Quantitative Finance 2019-09-23 Angelos Filos

Reinforcement Learning has emerged as a promising framework for developing adaptive and data-driven strategies, enabling market makers to optimize decision-making policies based on interactions with the limit order book environment. This…

Trading and Market Microstructure · Quantitative Finance 2026-02-17 Rafael Zimmer , Oswaldo Luiz do Valle Costa

Many real-world auctions are dynamic processes, in which bidders interact and report information over multiple rounds with the auctioneer. The sequential decision making aspect paired with imperfect information renders analyzing the…

Computer Science and Game Theory · Computer Science 2023-12-21 Vinzenz Thoma , Michael Curry , Niao He , Sven Seuken

Stock trading strategy plays a crucial role in investment companies. However, it is challenging to obtain optimal strategy in the complex and dynamic stock market. We explore the potential of deep reinforcement learning to optimize stock…

Machine Learning · Computer Science 2022-08-02 Xiao-Yang Liu , Zhuoran Xiong , Shan Zhong , Hongyang Yang , Anwar Walid