AI Cryptocurrency Trading Bot with LSTM Prediction

An automated trading bot for cryptocurrency futures trading on Binance, leveraging LSTM (Long Short-Term Memory) neural networks for price prediction and automated trading execution.

Overview

This bot combines deep learning with automated trading to create a sophisticated cryptocurrency trading system. It uses LSTM neural networks to predict price movements and automatically executes trades on Binance Futures based on these predictions.

Key Features

• LSTM Price Prediction

  • Uses historical price data to predict future movements
  • Implements a sliding window approach for time series analysis
  • Normalizes data for better prediction accuracy
  • Provides directional signals (up/down) based on prediction confidence

• Automated Futures Trading

  • Real-time order execution on Binance Futures
  • Supports both long and short positions
  • Automatic position management with stop-loss and take-profit orders
  • Handles multiple trading pairs simultaneously
  • Implements isolated margin trading with configurable leverage

• Risk Management

  • Configurable position sizes and leverage
  • Automatic stop-loss and take-profit placement
  • Continuous monitoring of open positions
  • Error handling and graceful failure recovery
  • Minimum notional value checks for order placement

How It Works

1. LSTM Prediction System

The LSTMPredictor class implements the price prediction logic:

• Takes historical price data with a configurable lookback period
• Normalizes the data using MinMaxScaler
• Trains an LSTM model with the following architecture:
  • LSTM layer (50 units) with return sequences
  • Dropout layer (20%)
  • LSTM layer (50 units)
  • Dropout layer (20%)
  • Dense layers for final prediction
• Generates trading signals based on predicted price movements

2. Trading Execution

The BinanceFuturesTrader class handles all trading operations:

• Monitors multiple trading pairs simultaneously
• Places market orders based on LSTM predictions
• Sets leverage and margin type for each trade
• Implements automatic stop-loss and take-profit orders
• Manages open positions and orders

3. Main Trading Loop

The main loop orchestrates the entire trading process:

1. Monitors current positions and their PnL
2. Processes existing positions:
   • Gets new predictions for open positions
   • Closes positions if prediction changes
3. Looks for new trading opportunities:
   • Analyzes all available trading pairs
   • Places new orders based on LSTM predictions
4. Implements error handling and retry mechanisms

Configuration Setup

Create config.py File

Create a file named config.py in the bots directory with the following structure:

config = {
    "name": "binance",
    "key": "your_binance_api_key",
    "secret": "your_binance_api_secret"
}

Configuration Parameters

Binance API Settings

• name: Always set to "binance"
• key: Your Binance API key
• secret: Your Binance API secret key
  • Generate these from your Binance account under API Management
  • Ensure Futures Trading is enabled for your API key

Trading Parameters

• volume: Amount in USDT for each trade
• tp_percentage: Take profit target (percentage)
• sl_percentage: Stop loss limit (percentage)
• leverage: Trading leverage (1x to 20x)
• margin_type: ISOLATED or CROSSED margin type

Trading Pairs

List of cryptocurrency pairs to trade (must be valid Binance Futures trading pairs)

LSTM Model Parameters

• lookback_period: Historical data points used for prediction
• prediction_threshold: Minimum confidence level for trade execution

Security Notes

• Never commit your config.py file to version control
• Keep your API keys secure and never share them
• Use IP restrictions in Binance API settings
• Add config.py to your .gitignore file

Configuration

The bot can be configured through the TradingConfig class:

• volume: Trading volume in USDT
• tp_percentage: Take profit percentage
• sl_percentage: Stop loss percentage
• leverage: Trading leverage (default: 1x)
• margin_type: Margin type (ISOLATED/CROSSED)

Requirements

• Python 3.8+
• TensorFlow 2.x
• Binance Futures account with API access
• Required Python packages:
  • numpy
  • pandas
  • keras
  • python-binance
  • scikit-learn

Installation

Prerequisites

• Python 3.8-3.11 (TensorFlow is not compatible with Python 3.13)
• pip (Python package installer)

Setup Steps

1. Clone the repository:

git clone https://github.com/halitince7/ai_trading_bot.git
cd ai_trading_bot

2. Create and activate a virtual environment:

# Create virtual environment
python -m venv venv

# Activate virtual environment
# On macOS/Linux:
source venv/bin/activate
# On Windows:
# venv\Scripts\activate

3. Install dependencies:

pip install -r requirements.txt

Usage

Run the trading bot:

cd bots
python future_trading.py

Risk Warning

This trading bot is for educational and experimental purposes. Please note:

• Cryptocurrency trading involves substantial risk
• Past performance does not guarantee future results
• Only trade with funds you can afford to lose
• Test thoroughly with small amounts before deploying significant capital

Future Improvements

• Add more sophisticated LSTM architectures
• Implement portfolio management
• Add backtesting capabilities
• Include more technical indicators
• Add web interface for monitoring
• Implement dynamic position sizing
• Add more risk management features

Contributing

1. Fork the repository
2. Create your feature branch
3. Commit your changes
4. Push to the branch
5. Create a Pull Request

License

This project is licensed under the MIT License.