FINRS: A Risk-Sensitive Trading Framework for Real Financial Markets
By: Bijia Liu, Ronghao Dang
Potential Business Impact:
Helps computers trade stocks safely and make more money.
Large language models (LLMs) have shown strong reasoning capabilities and are increasingly explored for financial trading. Existing LLM-based trading agents, however, largely focus on single-step prediction and lack integrated mechanisms for risk management, which reduces their effectiveness in volatile markets. We introduce FinRS, a risk-sensitive trading framework that combines hierarchical market analysis, dual-decision agents, and multi-timescale reward reflection to align trading actions with both return objectives and downside risk constraints. Experiments on multiple stocks and market conditions show that FinRS achieves superior profitability and stability compared to state-of-the-art methods.
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