Deep Q-Learning for Trading Cryptocurrency

Deep Q-Learning for Trading Cryptocurrency

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Deep Q-Learning for Trading Cryptocurrency. This article sets forth a framework for deep reinforcement learning as applied to trading cryptocurrencies.

Moreover, the authors adopt Q-Learning. Furthermore, Deep Q-Learning is a model-free reinforcement learning algorithm. Furthermore, the goal is to implement a deep neural network or networks to approximate the best possible states. And actions to take in the cryptocurrency market.

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Cryptocurrency & Blockchain

Firstly, Bitcoin, Ethereum, and Litecoin were selected as representatives to test the model. Secondly, the Deep Q trading agent generated an average portfolio return of 65.98%. Although it showed extreme volatility over the 2,000 runs. Despite the high volatility of deep reinforcement learning. The experiment demonstrates that this approach has an exceptionally high potential to be employed. Furthermore it provides a solid foundation on which to build further research.

Key Findings

  • ▪ The authors use deep neural networks to create a Deep Q-Learning trading agent that approximates the best actions to take. These actions are based on rewards to maximize returns from trading the three cryptocurrencies with the largest market capitalization.
  • ▪ The Deep Q-Learning agent generates a return of 65.98% on average over the course of 2,000 episodes; however, the returns do exhibit a large standard deviation given the highly volatile nature of the cryptocurrencies.
  • ▪ The authors introduce a framework or frameworks on which future deep reinforcement learning and rewards-based trading agents can be built and improved.

Read the Full Article Deep Q-Learning for Trading Cryptocurrency

In conclusion the authors of this paper would like to thank Cornell Financial Engineering. Secondly, Rutgers School of Quantitative Finance and the Journal of Financial Data Science for publishing our work.

Lastly, it was our pleasure and enjoyment to write this paper!

Deep Q-Learning for Trading Cryptocurrency