IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2502.17967.html
   My bibliography  Save this paper

LLM Knows Geometry Better than Algebra: Numerical Understanding of LLM-Based Agents in A Trading Arena

Author

Listed:
  • Tianmi Ma
  • Jiawei Du
  • Wenxin Huang
  • Wenjie Wang
  • Liang Xie
  • Xian Zhong
  • Joey Tianyi Zhou

Abstract

Recent advancements in large language models (LLMs) have significantly improved performance in natural language processing tasks. However, their ability to generalize to dynamic, unseen tasks, particularly in numerical reasoning, remains a challenge. Existing benchmarks mainly evaluate LLMs on problems with predefined optimal solutions, which may not align with real-world scenarios where clear answers are absent. To bridge this gap, we design the Agent Trading Arena, a virtual numerical game simulating complex economic systems through zero-sum games, where agents invest in stock portfolios. Our experiments reveal that LLMs, including GPT-4o, struggle with algebraic reasoning when dealing with plain-text stock data, often focusing on local details rather than global trends. In contrast, LLMs perform significantly better with geometric reasoning when presented with visual data, such as scatter plots or K-line charts, suggesting that visual representations enhance numerical reasoning. This capability is further improved by incorporating the reflection module, which aids in the analysis and interpretation of complex data. We validate our findings on NASDAQ Stock dataset, where LLMs demonstrate stronger reasoning with visual data compared to text. Our code and data are publicly available at https://github.com/wekjsdvnm/Agent-Trading-Arena.git.

Suggested Citation

  • Tianmi Ma & Jiawei Du & Wenxin Huang & Wenjie Wang & Liang Xie & Xian Zhong & Joey Tianyi Zhou, 2025. "LLM Knows Geometry Better than Algebra: Numerical Understanding of LLM-Based Agents in A Trading Arena," Papers 2502.17967, arXiv.org.
  • Handle: RePEc:arx:papers:2502.17967
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2502.17967
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bernardino Romera-Paredes & Mohammadamin Barekatain & Alexander Novikov & Matej Balog & M. Pawan Kumar & Emilien Dupont & Francisco J. R. Ruiz & Jordan S. Ellenberg & Pengming Wang & Omar Fawzi & Push, 2024. "Mathematical discoveries from program search with large language models," Nature, Nature, vol. 625(7995), pages 468-475, January.
    2. Terence Tai-Leung Chong & Wing-Kam Ng, 2008. "Technical analysis and the London stock exchange: testing the MACD and RSI rules using the FT30," Applied Economics Letters, Taylor & Francis Journals, vol. 15(14), pages 1111-1114.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erdemlioglu, Deniz & Petitjean, Mikael & Vargas, Nicolas, 2021. "Market instability and technical trading at high frequency: Evidence from NASDAQ stocks," Economic Modelling, Elsevier, vol. 102(C).
    2. Michael McAleer & John Suen & Wing Keung Wong, 2016. "Profiteering from the Dot-Com Bubble, Subprime Crisis and Asian Financial Crisis," The Japanese Economic Review, Japanese Economic Association, vol. 67(3), pages 257-279, September.
    3. Charl Maree & Christian W. Omlin, 2022. "Balancing Profit, Risk, and Sustainability for Portfolio Management," Papers 2207.02134, arXiv.org.
    4. Pick-Soon Ling & Ruzita Abdul-Rahim, 2017. "Market Efficiency Based on Unconventional Technical Trading Strategies in Malaysian Stock Market," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 88-96.
    5. Lijun Wang & Haizhong An & Xiaohua Xia & Xiaojia Liu & Xiaoqi Sun & Xuan Huang, 2014. "Generating Moving Average Trading Rules on the Oil Futures Market with Genetic Algorithms," Mathematical Problems in Engineering, Hindawi, vol. 2014, pages 1-10, May.
    6. Tania Morris & Jules Comeau, 2020. "Portfolio creation using artificial neural networks and classification probabilities: a Canadian study," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 34(2), pages 133-163, June.
    7. Gerritsen, Dirk F., 2016. "Are chartists artists? The determinants and profitability of recommendations based on technical analysis," International Review of Financial Analysis, Elsevier, vol. 47(C), pages 179-196.
    8. Zhang, Pengcheng & Xu, Kunpeng & Qi, Jiayin, 2023. "The impact of regulation on cryptocurrency market volatility in the context of the COVID-19 pandemic — evidence from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 222-246.
    9. Thi Thu Giang Nguyen & Robert Ślepaczuk, 2022. "The efficiency of various types of input layers of LSTM model in investment strategies on S&P500 index," Working Papers 2022-29, Faculty of Economic Sciences, University of Warsaw.
    10. Terence Tai-Leung Chong & Wing-Kam Ng & Venus Khim-Sen Liew, 2014. "Revisiting the Performance of MACD and RSI Oscillators," JRFM, MDPI, vol. 7(1), pages 1-12, February.
    11. Krzysztof Borowski & Izabela Pruchnicka-Grabias, 2019. "Optimal lengths of moving averages for the MACD oscillator for companies listed on the Warsaw Stock Exchange," Bank i Kredyt, Narodowy Bank Polski, vol. 50(5), pages 457-478.
    12. Heejin Yang & Doowon Ryu, 2021. "Investor Sentiment and Price Discrepancies between Common and Preferred Stocks in Korea," Sustainability, MDPI, vol. 13(10), pages 1-11, May.
    13. Seok, Sang Ik & Cho, Hoon & Ryu, Doojin, 2019. "Firm-specific investor sentiment and the stock market response to earnings news," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 221-240.
    14. Bao, Te & Corgnet, Brice & Hanaki, Nobuyuki & Riyanto, Yohanes E. & Zhu, Jiahua, 2023. "Predicting the unpredictable: New experimental evidence on forecasting random walks," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).
    15. Bai, Limiao & Yan, Sen & Zheng, Xiaolian & Chen, Ben M., 2015. "Market turning points forecasting using wavelet analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 437(C), pages 184-197.
    16. Seok, Sang Ik & Cho, Hoon & Ryu, Doojin, 2019. "Firm-specific investor sentiment and daily stock returns," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    17. Shangkun Deng & Zhihao Su & Yanmei Ren & Haoran Yu & Yingke Zhu & Chenyang Wei, 2022. "Can Japanese Candlestick Patterns be Profitable on the Component Stocks of the SSE50 Index?," SAGE Open, , vol. 12(3), pages 21582440221, August.
    18. Senliang Lu & Yehang Chen & Yuan Chen & Peijun Li & Junqi Sun & Changye Zheng & Yujian Zou & Bo Liang & Mingwei Li & Qinggeng Jin & Enming Cui & Wansheng Long & Bao Feng, 2025. "General lightweight framework for vision foundation model supporting multi-task and multi-center medical image analysis," Nature Communications, Nature, vol. 16(1), pages 1-16, December.
    19. Ni, Yensen & Huang, Paoyu & Chen, Yuhsin, 2019. "Board structure, considerable capital, and stock price overreaction informativeness in terms of technical indicators," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 514-528.
    20. Sukono & Dedi Rosadi & Di Asih I Maruddani & Riza Andrian Ibrahim & Muhamad Deni Johansyah, 2024. "Mechanisms of Stock Selection and Its Capital Weighing in the Portfolio Design Based on the MACD-K-Means-Mean-VaR Model," Mathematics, MDPI, vol. 12(2), pages 1-22, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2502.17967. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.