Integrating Large Language Models and Reinforcement Learning for Sentiment-Driven Quantitative Trading (2510.10526v1)

Abstract: This research develops a sentiment-driven quantitative trading system that leverages a LLM, FinGPT, for sentiment analysis, and explores a novel method for signal integration using a reinforcement learning algorithm, Twin Delayed Deep Deterministic Policy Gradient (TD3). We compare the performance of strategies that integrate sentiment and technical signals using both a conventional rule-based approach and a reinforcement learning framework. The results suggest that sentiment signals generated by FinGPT offer value when combined with traditional technical indicators, and that reinforcement learning algorithm presents a promising approach for effectively integrating heterogeneous signals in dynamic trading environments.