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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

In recent years, many practitioners in quantitative finance have attempted to use Deep Reinforcement Learning (DRL) to build better quantitative trading (QT) strategies. Nevertheless, many existing studies fail to address several serious…

Portfolio Management · Quantitative Finance 2022-06-14 Zitao Song , Xuyang Jin , Chenliang Li

Portfolio optimization requires dynamic allocation of funds by balancing the risk and return tradeoff under dynamic market conditions. With the recent advancements in AI, Deep Reinforcement Learning (DRL) has gained prominence in providing…

Portfolio Management · Quantitative Finance 2025-05-08 Arishi Orra , Aryan Bhambu , Himanshu Choudhary , Manoj Thakur , Selvaraju Natarajan

With the rapid development of artificial intelligence, data-driven methods effectively overcome limitations in traditional portfolio optimization. Conventional models primarily employ long-only mechanisms, excluding highly correlated assets…

Computational Finance · Quantitative Finance 2025-03-18 Gang Huang , Xiaohua Zhou , Qingyang Song

Embodied agents, such as robots and virtual characters, must continuously select actions to execute tasks effectively, solving complex sequential decision-making problems. Given the difficulty of designing such controllers manually,…

Robotics · Computer Science 2026-05-18 Pedro Santana

We propose a reinforcement learning (RL) framework that leverages multimodal data including historical stock prices, sentiment analysis, and topic embeddings from news articles, to optimize trading strategies for SP100 stocks. Building upon…

Portfolio Management · Quantitative Finance 2024-12-24 Sumit Nawathe , Ravi Panguluri , James Zhang , Sashwat Venkatesh

Recently equal risk pricing, a framework for fair derivative pricing, was extended to consider dynamic risk measures. However, all current implementations either employ a static risk measure that violates time consistency, or are based on…

Pricing of Securities · Quantitative Finance 2021-09-10 Saeed Marzban , Erick Delage , Jonathan Yumeng Li

We introduce a deep reinforcement learning (DRL) approach for solving management problems including inventory management, dynamic pricing, and recommendation. This DRL approach has the potential to lead to a large management model based on…

Artificial Intelligence · Computer Science 2024-03-04 Jinyang Jiang , Xiaotian Liu , Tao Ren , Qinghao Wang , Yi Zheng , Yufu Du , Yijie Peng , Cheng Zhang

Traditional economic models often rely on fixed assumptions about market dynamics, limiting their ability to capture the complexities and stochastic nature of real-world scenarios. However, reality is more complex and includes noise, making…

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

Attitude control of fixed-wing unmanned aerial vehicles (UAVs) is a difficult control problem in part due to uncertain nonlinear dynamics, actuator constraints, and coupled longitudinal and lateral motions. Current state-of-the-art…

Systems and Control · Electrical Eng. & Systems 2023-04-20 Eivind Bøhn , Erlend M. Coates , Dirk Reinhardt , Tor Arne Johansen

Deep reinforcement learning (DRL) agents are trained through trial-and-error interactions with the environment. This leads to a long training time for dense neural networks to achieve good performance. Hence, prohibitive computation and…

Machine Learning · Computer Science 2022-05-09 Ghada Sokar , Elena Mocanu , Decebal Constantin Mocanu , Mykola Pechenizkiy , Peter Stone

Many challenging real-world problems require the deployment of ensembles multiple complementary learning models to reach acceptable performance levels. While effective, applying the entire ensemble to every sample is costly and often…

Cryptography and Security · Computer Science 2022-09-20 Orel Lavie , Asaf Shabtai , Gilad Katz

Model-Free Reinforcement Learning has achieved meaningful results in stable environments but, to this day, it remains problematic in regime changing environments like financial markets. In contrast, model-based RL is able to capture some…

Machine Learning · Computer Science 2021-04-23 Eric Benhamou , David Saltiel , Serge Tabachnik , Sui Kai Wong , François Chareyron

Reinforcement learning (RL) is gaining attention by more and more researchers in quantitative finance as the agent-environment interaction framework is aligned with decision making process in many business problems. Most of the current…

Mathematical Finance · Quantitative Finance 2022-05-31 Huifang Huang , Ting Gao , Yi Gui , Jin Guo , Peng Zhang

Reinforcement Learning (RL) or Deep Reinforcement Learning (DRL) is a powerful approach to solving Markov Decision Processes (MDPs) when the model of the environment is not known a priori. However, RL models are still faced with challenges…

Systems and Control · Electrical Eng. & Systems 2024-06-04 Kabirat Olayemi , Mien Van , Luke Maguire , Sean McLoone

While researchers in the asset management industry have mostly focused on techniques based on financial and risk planning techniques like Markowitz efficient frontier, minimum variance, maximum diversification or equal risk parity, in…

Machine Learning · Computer Science 2020-10-20 Eric Benhamou , David Saltiel , Sandrine Ungari , Abhishek Mukhopadhyay

Reinforcement Learning (RL) is increasingly applied to large-scale decision-making problems like logistics, scheduling, and recommender systems, but existing algorithms struggle with the curse of dimensionality in such large discrete action…

Machine Learning · Computer Science 2026-05-12 Heiko Hoppe , Fabian Akkerman , Wouter van Heeswijk , Maximilian Schiffer

The paper explores the use of Deep Reinforcement Learning (DRL) in stock market trading, focusing on two algorithms: Double Deep Q-Network (DDQN) and Proximal Policy Optimization (PPO) and compares them with Buy and Hold benchmark. It…

Trading and Market Microstructure · Quantitative Finance 2025-06-06 Jędrzej Maskiewicz , Paweł Sakowski

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