trading_bot_v3/lib/ai-leverage-calculator.ts

/**
 * AI-Driven Dynamic Leverage Calculator
 * 
 * Calculates optimal leverage to maximize profits while maintaining safe liquidation distance
 * Strategy: Use maximum leverage possible without liquidation price being too close to stop loss
 */

interface LeverageCalculationParams {
  accountValue: number
  availableBalance: number
  entryPrice: number
  stopLossPrice: number
  side: 'long' | 'short'
  maxLeverageAllowed: number // Platform maximum (e.g., 20x for Drift)
  safetyBuffer: number // Distance between liquidation and SL (default: 10%)
}

interface LeverageResult {
  recommendedLeverage: number
  positionSize: number
  liquidationPrice: number
  marginRequired: number
  maxPossibleLeverage: number
  riskAssessment: 'LOW' | 'MEDIUM' | 'HIGH'
  reasoning: string
}

export class AILeverageCalculator {
  
  /**
   * Calculate optimal leverage for maximum profit with safe liquidation distance
   */
  static calculateOptimalLeverage(params: LeverageCalculationParams): LeverageResult {
    const {
      accountValue,
      availableBalance,
      entryPrice,
      stopLossPrice,
      side,
      maxLeverageAllowed,
      safetyBuffer = 0.10 // 10% safety buffer by default
    } = params

    console.log('🧮 AI Leverage Calculation:', {
      accountValue: accountValue.toFixed(2),
      availableBalance: availableBalance.toFixed(2),
      entryPrice,
      stopLossPrice,
      side,
      maxLeverageAllowed
    })

    // Strategy 1: Under $1k - Use 100% of available balance
    const useFullBalance = accountValue < 1000
    const baseAmount = useFullBalance ? availableBalance : availableBalance * 0.5 // 50% for accounts over $1k

    console.log(`💰 Balance Strategy: ${useFullBalance ? 'AGGRESSIVE (100%)' : 'CONSERVATIVE (50%)'} - Using $${baseAmount.toFixed(2)}`)

    // Calculate stop loss distance as percentage
    const stopLossDistance = Math.abs(entryPrice - stopLossPrice) / entryPrice
    console.log(`📊 Stop Loss Distance: ${(stopLossDistance * 100).toFixed(2)}%`)

    // Calculate maximum safe leverage based on liquidation distance
    const maxSafeLeverage = this.calculateMaxSafeLeverage(
      entryPrice,
      stopLossPrice,
      side,
      safetyBuffer
    )

    // Determine final leverage (limited by platform max and safety calculations)
    const finalLeverage = Math.min(maxSafeLeverage, maxLeverageAllowed)
    
    // Calculate position size and margin
    const positionSize = baseAmount * finalLeverage
    const marginRequired = positionSize / finalLeverage

    // Calculate liquidation price for verification
    const liquidationPrice = this.calculateLiquidationPrice(
      entryPrice,
      finalLeverage,
      side,
      marginRequired,
      positionSize
    )

    // Risk assessment
    const riskAssessment = this.assessRisk(finalLeverage, stopLossDistance, useFullBalance)

    // Generate AI reasoning
    const reasoning = this.generateLeverageReasoning(
      finalLeverage,
      maxSafeLeverage,
      maxLeverageAllowed,
      liquidationPrice,
      stopLossPrice,
      useFullBalance,
      side
    )

    const result: LeverageResult = {
      recommendedLeverage: finalLeverage,
      positionSize,
      liquidationPrice,
      marginRequired,
      maxPossibleLeverage: maxSafeLeverage,
      riskAssessment,
      reasoning
    }

    console.log('🎯 AI Leverage Result:', {
      recommendedLeverage: `${finalLeverage.toFixed(1)}x`,
      positionSize: `$${positionSize.toFixed(2)}`,
      liquidationPrice: `$${liquidationPrice.toFixed(4)}`,
      riskAssessment,
      reasoning
    })

    return result
  }

  /**
   * Calculate maximum safe leverage where liquidation price maintains safety buffer from stop loss
   */
  private static calculateMaxSafeLeverage(
    entryPrice: number,
    stopLossPrice: number,
    side: 'long' | 'short',
    safetyBuffer: number
  ): number {
    
    // Calculate where liquidation should be (beyond stop loss + safety buffer)
    let maxLiquidationPrice: number
    
    if (side === 'long') {
      // For longs: liquidation should be below stop loss
      maxLiquidationPrice = stopLossPrice * (1 - safetyBuffer)
    } else {
      // For shorts: liquidation should be above stop loss  
      maxLiquidationPrice = stopLossPrice * (1 + safetyBuffer)
    }

    console.log(`🛡️ Max Safe Liquidation Price: $${maxLiquidationPrice.toFixed(4)} (${side} position)`)

    // Calculate max leverage that keeps liquidation at safe distance
    // Simplified liquidation formula: For longs: liq = entry * (1 - 1/leverage)
    let maxLeverage: number
    
    if (side === 'long') {
      // entry * (1 - 1/leverage) = maxLiquidationPrice
      // 1 - 1/leverage = maxLiquidationPrice / entry
      // 1/leverage = 1 - maxLiquidationPrice / entry
      // leverage = 1 / (1 - maxLiquidationPrice / entry)
      maxLeverage = 1 / (1 - maxLiquidationPrice / entryPrice)
    } else {
      // For shorts: liq = entry * (1 + 1/leverage)
      // entry * (1 + 1/leverage) = maxLiquidationPrice
      // 1 + 1/leverage = maxLiquidationPrice / entry
      // 1/leverage = maxLiquidationPrice / entry - 1
      // leverage = 1 / (maxLiquidationPrice / entry - 1)
      maxLeverage = 1 / (maxLiquidationPrice / entryPrice - 1)
    }

    // Ensure reasonable bounds
    maxLeverage = Math.max(1, Math.min(maxLeverage, 50)) // Between 1x and 50x

    console.log(`⚖️ Max Safe Leverage: ${maxLeverage.toFixed(2)}x`)
    
    return maxLeverage
  }

  /**
   * Calculate liquidation price for given position parameters
   */
  private static calculateLiquidationPrice(
    entryPrice: number,
    leverage: number,
    side: 'long' | 'short',
    marginRequired: number,
    positionSize: number
  ): number {
    
    // Simplified liquidation calculation
    // In reality, this would need to account for fees, funding, etc.
    
    if (side === 'long') {
      // Long liquidation: entry * (1 - 1/leverage)
      return entryPrice * (1 - 1/leverage)
    } else {
      // Short liquidation: entry * (1 + 1/leverage)
      return entryPrice * (1 + 1/leverage)
    }
  }

  /**
   * Assess risk level based on leverage and position parameters
   */
  private static assessRisk(
    leverage: number,
    stopLossDistance: number,
    useFullBalance: boolean
  ): 'LOW' | 'MEDIUM' | 'HIGH' {
    
    if (leverage <= 2 && stopLossDistance >= 0.05) return 'LOW'
    if (leverage <= 5 && stopLossDistance >= 0.03) return 'MEDIUM'
    if (leverage <= 10 && stopLossDistance >= 0.02) return 'MEDIUM'
    
    return 'HIGH'
  }

  /**
   * Generate AI reasoning for leverage decision
   */
  private static generateLeverageReasoning(
    finalLeverage: number,
    maxSafeLeverage: number,
    maxPlatformLeverage: number,
    liquidationPrice: number,
    stopLossPrice: number,
    useFullBalance: boolean,
    side: 'long' | 'short'
  ): string {
    
    const reasons = []
    
    // Balance strategy reasoning
    if (useFullBalance) {
      reasons.push("Account <$1k: Using 100% available balance for maximum growth")
    } else {
      reasons.push("Account >$1k: Using 50% balance for controlled risk")
    }

    // Leverage limitation reasoning
    if (finalLeverage === maxSafeLeverage) {
      reasons.push(`Max safe leverage ${finalLeverage.toFixed(1)}x maintains liquidation safely beyond stop loss`)
    } else if (finalLeverage === maxPlatformLeverage) {
      reasons.push(`Platform limit ${maxPlatformLeverage}x reached (could use ${maxSafeLeverage.toFixed(1)}x safely)`)
    }

    // Liquidation safety reasoning
    const liquidationBuffer = side === 'long' 
      ? (stopLossPrice - liquidationPrice) / stopLossPrice * 100
      : (liquidationPrice - stopLossPrice) / stopLossPrice * 100

    reasons.push(`Liquidation $${liquidationPrice.toFixed(4)} is ${liquidationBuffer.toFixed(1)}% beyond stop loss`)

    return reasons.join('. ')
  }
}

export default AILeverageCalculator