AI Trading: Systematic Evaluation of Large Language Models for Technical Market Analysis
A preprint systematically evaluates five large language models (LLMs)—GPT-4 Turbo, Claude 3 Opus, Gemini 1.5 Pro, Llama 3 70B, and FinGPT—for technical market analysis tasks. The study finds that GPT-4 Turbo achieves the highest annualized return and Sharpe ratio among general-purpose models, while FinGPT offers competitive risk-adjusted performance due to domain-specific fine-tuning. Both models outperform a passive S&P 500 benchmark in simulated backtesting, but all exhibit notable failure modes such as numerical hallucination and context-window limitations.
Why it matters: This work provides a rigorous benchmark for LLMs in financial trading, highlighting both their potential and critical limitations for real-world use.
Full story at: arXiv AI/ML ↗