Final Year Project-1

Final year project
documentation
(BSCS)
By
students
Zaroon shahid -177

Daniyal Aqil 163
Supervised by:
Teacher Name
MISS Aqsa Iftikhar
INTRODUCTION
 The purpose of this document is to outline the software requirements for the
development of a Crypto Currency Trading Bot. The trading bot is intended to
automate the process of buying and selling various crypto currencies on different
exchanges, providing users with an efficient and intelligent tool to execute
trades.
 The scope of this project includes the design, development, implementation, and
testing of a cryptocurrency trading bot capable of executing predefined trading
strategies across various cryptocurrency exchanges. The bot will integrate with
exchange APIs, analyze market data in real-time, and execute buy and sell orders
based on user-defined parameters and trading algorithms.
Project Title : Crypto currency Trading
bot
 System Overview

 2.1 System Description

 The Crypto Currency Trading Bot will be a standalone application designed to run on multiple platforms,
providing users with the ability to trade crypto currencies automatically. The bot will support various
trading pairs and provide real-time market data for decision-making.

 2.2 System Architecture

 The system will consist of the following major components:

 User Interface: A user-friendly interface for configuring trading strategies, monitoring trades, and
viewing historical performance.
 Market Data Engine: A module for collecting and analyzing real-time market data from different crypto
currency exchanges.
 Order Execution Engine: The component responsible for placing buy and sell orders on supported
exchanges.
 Risk Management System: A set of algorithms to manage and mitigate trading risks.
bot
Functional Requirements
User Management
 User Registration: Users must be able to create accounts with

the trading bot.
 Authentication: Secure authentication mechanisms to protect
user accounts.
bot
 Trading Features
 Automated Trading: Users can set up automated trading strategies based on technical
indicators, market trends, and other parameters.
 Manual Trading: Users can manually execute buy and sell orders through the user
interface.
 Market Data Analysis

 Real-time Data:

 The system should provide real-time market data for supported trading pairs.

 Technical Indicators:

 Users can access and utilize various technical indicators for decision-making.
bot
 Order Management

 Place Orders:

 The system should allow users to place market and limit orders.
 Cancel Orders: Users can cancel open orders through the user interface.


 3.5 Risk Management

 Position Sizing:

 Implement risk management algorithms to determine appropriate position sizes.

 Stop-Loss and Take-Profit:
 Users can set stop-loss and take-profit levels for trades.
bot
 External Interface Requirements


 User Interfaces

 The trading bot will have a web-based user interface for configuration and
monitoring. The interface will include dashboards, charts, and settings for
trading strategies.

 Hardware Interfaces

 The Crypto Currency Trading Bot will run on standard hardware with internet
connectivity. It will interact with exchange APIs over the internet.
bot
 System Features


 4.1 Trading Strategies

 The trading bot will support multiple trading strategies, including but
not limited to:

 Moving Average Crossover
 Relative Strength Index (RSI) Analysis
 Bollinger Bands Strategy
bot
 Real-Time Market Data

 The system will fetch real-time market data, including price, volume, and order
book information, to inform trading decisions.

 4.3 Portfolio Management

 Users can set allocation preferences, and the trading bot will automatically
rebalance portfolios based on these preferences.

 4.4 Order Execution

 The bot will execute buy and sell orders based on the configured trading
strategies, taking into account user-defined parameters.
bot
 Performance
 Response Time:
 The system should have low-latency response times for
market data updates and order executions.
 Scalability:
 The bot should be able to handle a growing number of
users and trades.

bot
Security
 Data Encryption:
 All sensitive user data and communication must be
encrypted.
 API Security: Secure API key management for
interacting with crypto currency exchanges.
bot
 PROBLEM DEFINITION
Market Volatility
Cryptocurrency markets are known for their high
volatility, presenting challenges for traders to execute
timely and profitable trades manually.
Time Constraints
 Manual trading requires constant monitoring of market
movements, which can be time-consuming and
impractical for traders with other commitments.
bot
 Execution Speed
Competitive advantage in cryptocurrency trading often
relies on the speed of trade execution, which is difficult
to achieve consistently through manual trading.
Complexity of Strategies
 Implementing complex trading strategies involving
multiple parameters and indicators can be daunting
for novice traders without programming skills.
bot
 24/7 Market Operation: Unlike traditional stock markets

that operate during specific hours, cryptocurrency markets
are open 24/7. This constant operation can be exhausting
for traders who need to monitor market movements and
execute trades round the clock
 Emotional Trading: Human emotions such as fear, greed,
and uncertainty often influence trading decisions.
Emotional trading can lead to impulsive decisions, resulting
in losses. Traders may find it difficult to adhere to
predefined trading strategies consistently.
bot
 Complexity of Analysis: Analyzing cryptocurrency markets

requires understanding various technical indicators,
market trends, and news events. Conducting this analysis
manually can be time-consuming and prone to errors.
 High Competition: The cryptocurrency market is highly
competitive, with traders constantly seeking to gain an
edge over others. Traders may struggle to keep up with
market trends and competitors' strategies without
advanced tools and technologies.
bot
 METHODOLOGY
 Research Methodology:

 Understanding the cryptocurrency market dynamics, trading strategies, and
technological landscape is fundamental. Our research methodology involved:

 Literature Review: Comprehensive study of existing literature on cryptocurrency
trading, algorithmic trading, and relevant technologies.

 Market Analysis: Examination of historical data, trends, and market behaviors to
identify potential trading opportunities and risks.
 Competitor Analysis: Evaluation of existing cryptocurrency trading bots to
understand their functionalities, strengths, and weaknesses.
bot
 Development Approach:
 Developing a robust and efficient trading bot
necessitates a structured approach. Our development
approach encompasses:
 Agile Methodology: Iterative development cycles

allowing for flexibility, adaptation to market changes,
and continuous improvement.
bot
 Modular Design: Breaking down the system into modular components for
easier maintenance, scalability, and reusability.

 Test-Driven Development (TDD): Writing tests before implementing
features to ensure functionality and prevent regressions.

 Technological Stack:
 Selecting appropriate technologies is crucial for the performance and
security of the trading bot. Our technological stack includes:

 Programming Languages: Python for its versatility, extensive libraries (such
as pandas, numpy, and asyncio), and vibrant community support.
bot
 Algorithmic Strategies:

 The heart of the trading bot lies in its trading strategies. Our methodology for designing and
implementing these strategies involves:


 Technical Analysis: Utilizing various technical indicators (e.g., Moving Averages, Relative Strength
Index) to analyze market trends and make informed trading decisions.


 Machine Learning: Employing machine learning algorithms for pattern recognition, sentiment
analysis, and prediction of market movements.


 Risk Management: Implementing risk mitigation strategies such as stop-loss orders, position sizing
algorithms, and portfolio diversification techniques.
bot
 Testing and Validation:


 Thorough testing and validation are conducted to ensure the reliability and
robustness of the trading bot. Our methodology includes:

 Unit Testing: Testing individual components to verify their correctness and
functionality.
 Integration Testing: Testing the interaction between different modules to
ensure seamless operation.
 Backtesting: Simulating trading strategies against historical data to assess their
performance and optimize parameters.
 Live Testing: Deploying the bot in a simulated or sandbox environment before
live trading to identify and resolve any potential issues
bot
DETAILED DESIGN AND ARCHITECTURE

System Architecture
The system architecture of the Crypto Currency Trading Bot is designed to be
modular, scalable, and flexible to accommodate various trading strategies and
market conditions. The architecture consists of the following main components:
User Interface (UI): This component provides a graphical interface for users to
interact with the trading bot. It includes features such as dashboard, settings
configuration, real-time market data visualization, and reporting
Trading Engine: The core of the system responsible for executing trades based
on predefined algorithms and strategies. It interacts with cryptocurrency
exchanges' APIs to fetch market data, place buy/sell orders, and manage
portfolio positions
bot
 Algorithmic Trading Strategies: This component contains various

trading algorithms and strategies implemented to analyze market
data and make trading decisions. It includes techniques such as
trend following, mean reversion, arbitrage, and sentiment analysis.
 Risk Management: Ensures that trading activities are conducted
within acceptable risk parameters. It includes features such as
position sizing, stop-loss mechanisms, and portfolio diversification
strategies.
 Data Storage: Stores historical market data, user preferences, and
trading logs. It utilizes databases or distributed storage systems to
efficiently manage large volumes of data.
bot
 Detailed Design
 5.2.1 User Interface (UI)
 The UI module is designed to be intuitive and user-friendly, providing essential
functionalities for users to manage and monitor their trading activities. It consists
of the following components:
 Dashboard: Displays an overview of the bot's performance, including current
portfolio value, recent trades, and market trends.
 Settings: Allows users to configure trading parameters such as preferred
cryptocurrencies, trading strategies, risk thresholds, and exchange API credentials.
 Market Data Visualization: Provides real-time charts and graphs to visualize market
trends, price movements, and trading indicators.
 Reporting: Generates detailed reports on trading performance, including
profits/losses, win/loss ratios, and trade history.
bot
 Trading Engine
 The trading engine is implemented as a modular and extensible system,
allowing for the easy integration of new trading strategies and market data
sources. It consists of the following components:
 Data Fetching: Fetches real-time market data from cryptocurrency exchanges'
APIs, including price, volume, order book depth, and trade history.
 Strategy Execution: Applies predefined trading algorithms and strategies to
analyze market data and generate trading signals.
 Order Management: Places buy/sell orders on cryptocurrency exchanges,
monitors order status, and manages portfolio positions.
 Execution Control: Implements risk management rules to control the
frequency and size of trades, prevent slippage, and minimize transaction costs
bot
bot
Architecture Design Approach
Architecture Design
bot
 Subsystem Architecture
bot
 Notification System:
 Sends alerts and notifications to users based on
predefined events.
 Notifications could include trade executions, strategy
performance updates, etc.
 Supports various communication channels such as
email, SMS, and mobile push notifications.
bot
bot
 System Architecture:
 Frontend: Interface for users to interact with the bot.
 Backend: Core logic and trading algorithms reside here.
 Data Storage: Database for storing user preferences, market data, and
transaction history.
 API Integrations: Interfaces with cryptocurrency exchanges for market
data retrieval and order placement.
 Risk Management: Component responsible for monitoring and managing
risk factors such as position size, leverage, and portfolio diversification.
 Reporting: Module for generating reports on trading performance and
metrics.
bot
 Responsibilities
 Market Data Retrieval: The bot is responsible for fetching real-time market data from various cryptocurrency
exchanges. This includes price, volume, order book data, and other relevant indicators.
 Strategy Execution: Based on predefined trading strategies, the bot analyzes incoming market data to make
informed trading decisions. These strategies may include technical analysis indicators, sentiment analysis, machine
learning models, or a combination of these.
 Order Placement: Once a trading decision is made, the bot is responsible for placing buy or sell orders on the
connected cryptocurrency exchanges. It ensures that orders are placed accurately and in accordance with the
specified parameters (e.g., price limits, order size)
 Risk Management: The bot implements risk management protocols to mitigate potential losses. This may involve
setting stop-loss orders, position sizing strategies, or dynamically adjusting trading parameters based on market
conditions.
 Portfolio Management: In addition to executing individual trades, the bot manages the overall cryptocurrency
portfolio. It tracks the performance of each asset, rebalances the portfolio as needed, and provides insights into
portfolio diversification.

 Performance Monitoring: The bot continuously monitors its own performance and the performance of executed
trades. It tracks key metrics such as profitability, win rate, drawdowns, and other performance indicators.
 Notifications and Reporting: The bot provides notifications to users about significant market events, executed
trades, and portfolio updates. It also generates reports summarizing trading activity, performance metrics, and
portfolio analytics.
 Customization and Configuration: Users can customize the bot's parameters and configuration settings according
to their preferences and trading goals. This includes selecting trading strategies, adjusting risk parameters, and
specifying exchange connections.
bot
 Software Resources:

 Exchange APIs: The bot interacts with cryptocurrency exchange platforms through their
APIs to access market data, place orders, and manage positions.
 Market Data Feeds: Real-time or historical market data feeds are essential for the bot to
make informed trading decisions.
 Trading Algorithms: The core logic of the bot resides in its trading algorithms, which
analyze market conditions, identify trading opportunities, and execute trades
accordingly.
 Database or Persistent Storage: The bot may utilize a database or some form of
persistent storage to store configuration settings, trade history, and other relevant data.
 External Libraries: Depending on the programming language used to develop the bot, it
may rely on external libraries for tasks such as data analysis, mathematical
computations, or API interactions.
bot
 Race Conditions:

 Simultaneous Access to Resources: Race conditions may occur if
multiple instances of the bot attempt to access and modify
shared resources concurrently. For example, if two instances of
the bot simultaneously attempt to execute a trade with
insufficient funds, it could lead to inconsistencies or errors.
 Order Placement: When multiple trading signals are generated
simultaneously, there could be a race condition in determining
the order of execution for these signals, potentially resulting in
conflicting actions.
bot
 Deadlock Situations:
 Resource Contention: Deadlocks may occur if the
bot's threads or processes get stuck waiting for
resources that are held by other threads or processes
indefinitely. For instance, if one part of the bot is
waiting for a response from an exchange API while
holding a lock, and another part is waiting for
resources that are held by the first part, a deadlock
situation may arise.
bot
bot
 IMPLEMENTATION AND TESTING

 Implementation
 Technology Stack
 The Crypto Currency Trading Bot is implemented using the following technology
stack:
 Programming Language: Python
 Libraries/Frameworks:
 Exchange APIs (e.g., Binance API, Coinbase API)
 Cryptocurrency Libraries (e.g., ccxt)
 Data Analysis and Visualization Libraries (e.g., Pandas, Matplotlib)
 Machine Learning Libraries (e.g., TensorFlow, Scikit-learn)
 Development Environment: Integrated Development Environment (IDE) such as
PyCharm, Jupyter
bot
 Testing
 Unit Testing
 Unit tests are conducted to verify the functionality of each component in isolation. Mock objects are used to
simulate external dependencies such as exchange APIs and data sources. The PyTest framework is employed for
writing and executing unit tests automatically.
 Integration Testing
 Integration tests are performed to ensure that all components interact correctly with each other as per the
specified design. Test scenarios cover various use cases such as strategy execution, order placement, risk
management, and performance monitoring. Integration tests are executed both manually and automatically
using test scripts.
 System Testing
 System testing involves testing the entire Crypto Currency Trading Bot as a unified system. It verifies that the bot
operates as expected in a real-world environment, including handling network latency, API rate limits, and
unexpected errors. Test cases encompass end-to-end trading workflows, from data collection to order execution
to performance analysis.
 Performance Testing
 Performance testing evaluates the scalability and responsiveness of the trading bot under different load
conditions. Stress tests are conducted to assess the system's stability and resource utilization during peak trading
hours. Performance metrics such as response time, throughput, and resource consumption are measured and
analyzed to identify bottlenecks and optimize system performance
bot
 Core Functionalities
 Market Data Collection
 The bot collects real-time market data from various cryptocurrency exchanges via their APIs, including price
feeds, order book snapshots, and trade history.
 Strategy Implementation
 Multiple trading strategies were implemented, including trend following, mean reversion, and arbitrage,
utilizing technical indicators such as moving averages, RSI, and Bollinger Bands.
 Order Execution
 The bot executes buy and sell orders on connected exchanges based on predefined trading strategies and
risk management rules, utilizing exchange APIs for order placement and execution.
 Testing Methodologies
 The bot's functionality was thoroughly tested using both unit tests and integration tests, covering various
use cases, edge cases, and error scenarios. Performance testing was conducted to evaluate the bot's
execution speed, scalability, and reliability under different market conditions.
 Evaluation
 The cryptocurrency trading bot demonstrated high accuracy in executing trades according to predefined
strategies, achieving consistent returns across different market conditions. Performance metrics such as
profitability, Sharpe ratio, and maximum drawdown were analyzed to assess the bot's effectiveness in
generating alpha and managing risk.
bot
 CONCLUSION AND FUTURE WORK

Summary
 In conclusion, the development of the cryptocurrency trading bot has
addressed the challenges associated with manual trading in volatile
cryptocurrency markets. The bot provides users with a powerful tool to
automate their trading strategies, optimize performance, and capitalize on
market opportunities.
 Future Work
 Future work will focus on further enhancing the bot's capabilities,
expanding supported exchanges and trading pairs, optimizing trading
strategies, and integrating advanced features such as machine learning and
sentiment analysis for improved decision-making. Additionally, ongoing
research and development will be conducted to adapt to evolving market
dynamics and regulatory requirements in the cryptocurrency space.
bot
 REFERENCES
 "Mastering Bitcoin: Unlocking Digital Cryptocurrencies" by Andreas M.
Antonopoulos
 "Algorithmic Trading: Winning Strategies and Their Rationale" by Ernest
P. Chan
 "Python for Finance" by Yves Hilpisch
 "Building Winning Algorithmic Trading Systems: A Trader's Journey From
Data Mining to Monte Carlo Simulation to Live Trading" by Kevin J. Davey
 "Crypto Trading 101: How to Trade Crypto currencies for Profit" by Clem
Chambers
 "Hands-On Machine Learning for Algorithmic Trading" by Stefan Jansen
Project Title : Crypto currency
Trading bot
 USE CASE DIAGRAM

bot
 ENTITY RELATIONSHIP DIAGRAM

bot
 ARCHITECTURE DIAGRAM
bot
 Activity Diagram
bot
bot
 SEQENCE DIAGRAM
bot
 Component Diagram
State Machine Diagram
bot
 Class Diagram
bot
 Data Flow Diagram

bot
 DATABASE DIAGRAM
bot
bot

Final Year Project-1

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Final Year Project-1

Uploaded by

Copyright:

Available Formats

Final year project

Zaroon shahid -177

 User Registration: Users must be able to create accounts with

 External Interface Requirements

 Real-Time Market Data

 24/7 Market Operation: Unlike traditional stock markets

 Complexity of Analysis: Analyzing cryptocurrency markets

 Agile Methodology: Iterative development cycles

 Testing and Validation:

DETAILED DESIGN AND ARCHITECTURE

 Algorithmic Trading Strategies: This component contains various

 IMPLEMENTATION AND TESTING

 CONCLUSION AND FUTURE WORK

 USE CASE DIAGRAM

 ENTITY RELATIONSHIP DIAGRAM

 Data Flow Diagram

You might also like