Automated Cryptocurrency Trading Bot

Algorithmic Trading System Built on AWS Lambda

A serverless trading bot that automatically executes cryptocurrency trades on Kraken exchange using market analysis algorithms and risk management protocols.

System Overview

Serverless Architecture - Runs on AWS Lambda with scheduled execution, eliminating server maintenance and reducing operational costs

API Integration - Connects to Kraken exchange for order execution and CoinMarketCap for real-time price data across 24 whitelisted cryptocurrencies

Algorithmic Decision Making - Uses weighted price change analysis across 1-hour, 24-hour, and 7-day timeframes to identify optimal entry points

Risk Management - Implements automatic stop-loss orders and profit-taking mechanisms with configurable thresholds

Core Functionality

Market Analysis Algorithm

• Analyzes price stability and momentum across multiple timeframes

• Weights recent price changes more heavily than historical data

• Filters out consistently declining assets to avoid falling knife scenarios

• Only executes trades when market conditions meet minimum stability thresholds

Order Management System

• Buy Orders: Creates limit orders 0.1% below current market price for better execution

• Sell Orders: Sets profit targets 0.75% above purchase price

• Order Editing: Gradually lowers sell prices if orders remain unfilled after multiple cycles

• Position Tracking: Monitors order status and manages trade lifecycle

State Management

• Uses AWS Systems Manager Parameter Store to track execution cycles

• Implements waiting periods to avoid overtrading in volatile markets

• Maintains trade history and performance metrics

Technical Implementation

Language: Python 3.x deployed as AWS Lambda function
APIs: Kraken Pro API for trading, CoinMarketCap Pro API for market data
Authentication: HMAC-SHA512 signatures for secure API communication
Storage: AWS SSM Parameter Store for state persistence
Notifications: SNS integration for trade alerts and error reporting
Scheduling: Configurable execution intervals (20-30 minute cycles)

Risk Management Features

Portfolio Limits - Fixed $2,350 position sizing to control exposure
Market Filters - Only trades assets with $500M+ market cap for liquidity
Threshold Controls - Requires market stability scores above a specific threshold for execution
Backup Symbol Logic - Avoids repeatedly trading the same asset
Error Handling - Comprehensive exception management with notification alerts

Adoption Considerations

Deployment - Requires setting up AWS Lambda w/ schedule, SSM Parameter Store and IAM Service Roles
Execution Speed - Serverless architecture enables rapid response to market conditions
Cost Efficiency - Pay-per-execution model reduces operational expenses
Scalability - Can handle multiple trading pairs without infrastructure changes
Reliability - Built-in error visibility and notification systems

Key Limitations

Market Dependency - Performance tied to overall crypto market conditions
Algorithm Simplicity - Uses basic technical indicators rather than advanced ML models
Limited Backtesting - Not run for an extended period
Exchange Risk - Relies on single exchange (Kraken) for execution
Regulatory Considerations - Designed for personal use, not institutional deployment

Technical Skills Demonstrated

• API Integration with financial services requiring secure authentication

• Serverless Architecture design and implementation

• Algorithmic Trading concepts and risk management

• State Management in distributed systems

• Error Handling in financial applications where reliability is critical

• Cloud Service Integration across multiple AWS services

This project showcases practical experience with financial APIs, algorithmic decision-making, and serverless architecture while demonstrating understanding of trading risks and system limitations.