EvolveTrade: Experience-Driven Policy Refinement for Self-Evolving LLM Trading Agents
EvolveTrade lets LLM trading agents self-refine their tool-use policy from realized portfolio feedback, improving Sharpe ratios.
EvolveTrade treats a tool-using trading agent's system prompt as a text-parameterized policy that a Policy Agent revises after each update interval using accumulated decision traces and realized portfolio feedback, keeping the backbone LLM fixed. Experiments across multiple market regimes and two LLM backbones show improved Sharpe Ratio and Cumulative Return over fixed-policy baselines in most settings. Behavioral analyses show evolved policies increase code-mediated analysis and activate regime-relevant computations, with case-level attributions linking policy changes to returns.
- System prompt treated as a text-parameterized policy revised by a Policy Agent
- Backbone LLM stays fixed while the policy evolves each update interval
- Improves Sharpe Ratio and Cumulative Return in most evaluated settings
- Evolved policies increase code-mediated analysis and regime-relevant computations
- Case-level attributions trace policy changes to realized returns
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Large language model (LLM) trading agents can combine market data, news, and executable analysis, but their behavior is often controlled by static hand-written tool-use policies that are fixed before deployment. This limits their ability to adapt how they gather evidence, invoke tools, verify signals, and manage risk under changing market regimes. We introduce EvolveTrade, a self-evolving framework that treats the system prompt of a tool-using trading agent as a text-parameterized policy. After each update interval, a Policy Agent revises this policy using accumulated decision traces and realized portfolio feedback, while keeping the backbone LLM fixed. The updated policy is then used for the next batch of trading decisions, enabling the agent to refine its information-acquisition and portfolio-construction procedure over time. Experiments across multiple market regimes and two LLM backbones show that EvolveTrade often improves Sharpe Ratio and Cumulative Return over fixed-policy LLM baselines, achieving the improved SR and CR in most evaluated settings. Behavioral analyses further show that self-evolved policies increase code-mediated analysis and activate regime-relevant computations; case-level policy-to-return attributions trace how policy-induced allocation changes contribute to realized return differences. These results suggest that adapting the reusable procedure governing tool use is a key direction for building more robust LLM trading agents.
Text extracted automatically; images, tables and formatting may be missing. Original: https://huggingface.co/papers/2609.17632