refactor: move database initialization from entrypoint to application

Move database initialization logic from shell script to Python application
lifespan, following separation of concerns and improving maintainability.

Benefits:
- Single source of truth for database initialization (api/main.py lifespan)
- Better testability - Python code vs shell scripts
- Clearer logging with structured messages
- Easier to debug and maintain
- Infrastructure (entrypoint.sh) focuses on service orchestration
- Application (api/main.py) owns its data layer

Changes:
- Removed database init from entrypoint.sh
- Enhanced lifespan function with detailed logging
- Simplified entrypoint script (now 4 steps instead of 5)
- All tests pass (28/28 API endpoint tests)

api/main.py

@@ -17,6 +17,7 @@ from pathlib import Path
 from fastapi import FastAPI, HTTPException, Query
 from fastapi.responses import JSONResponse
 from pydantic import BaseModel, Field, field_validator
+from contextlib import asynccontextmanager
 
 from api.job_manager import JobManager
 from api.simulation_worker import SimulationWorker
@@ -127,21 +128,46 @@ def create_app(
     Returns:
         Configured FastAPI app
     """
+    @asynccontextmanager
+    async def lifespan(app: FastAPI):
+        """Initialize database on startup, cleanup on shutdown if needed"""
+        from tools.deployment_config import is_dev_mode, get_db_path
+        from api.database import initialize_dev_database, initialize_database
+
+        # Startup - use closure to access db_path from create_app scope
+        logger.info("🚀 FastAPI application starting...")
+        logger.info("📊 Initializing database...")
+
+        if is_dev_mode():
+            # Initialize dev database (reset unless PRESERVE_DEV_DATA=true)
+            logger.info("  🔧 DEV mode detected - initializing dev database")
+            dev_db_path = get_db_path(db_path)
+            initialize_dev_database(dev_db_path)
+            log_dev_mode_startup_warning()
+        else:
+            # Ensure production database schema exists
+            logger.info("  🏭 PROD mode - ensuring database schema exists")
+            initialize_database(db_path)
+
+        logger.info("✅ Database initialized")
+        logger.info("🌐 API server ready to accept requests")
+
+        yield
+
+        # Shutdown (if needed in future)
+        logger.info("🛑 FastAPI application shutting down...")
+
     app = FastAPI(
         title="AI-Trader Simulation API",
         description="REST API for triggering and monitoring AI trading simulations",
-        version="1.0.0"
+        version="1.0.0",
+        lifespan=lifespan
     )
 
     # Store paths in app state
     app.state.db_path = db_path
     app.state.config_path = config_path
 
-    @app.on_event("startup")
-    async def startup_event():
-        """Display DEV mode warning on startup if applicable"""
-        log_dev_mode_startup_warning()
-
     @app.post("/simulate/trigger", response_model=SimulateTriggerResponse, status_code=200)
     async def trigger_simulation(request: SimulateTriggerRequest):
         """
@@ -500,7 +526,7 @@ app = create_app()
 if __name__ == "__main__":
     import uvicorn
 
-    # Display DEV mode warning if applicable
-    log_dev_mode_startup_warning()
+    # Note: Database initialization happens in startup_event()
+    # DEV mode warning will be displayed there as well
 
     uvicorn.run(app, host="0.0.0.0", port=8080)

entrypoint.sh

@@ -36,12 +36,7 @@ fi
 
 echo "✅ Environment variables validated"
 
-# Step 1: Initialize database
-echo "📊 Initializing database..."
-python -c "from api.database import initialize_database; initialize_database('data/jobs.db')"
-echo "✅ Database initialized"
-
-# Step 2: Merge and validate configuration
+# Step 1: Merge and validate configuration
 echo "🔧 Merging and validating configuration..."
 python -c "from tools.config_merger import merge_and_validate; merge_and_validate()" || {
     echo "❌ Configuration validation failed"
@@ -50,7 +45,7 @@ python -c "from tools.config_merger import merge_and_validate; merge_and_validat
 export CONFIG_PATH=/tmp/runtime_config.json
 echo "✅ Configuration validated and merged"
 
-# Step 3: Start MCP services in background
+# Step 2: Start MCP services in background
 echo "🔧 Starting MCP services..."
 cd /app
 python agent_tools/start_mcp_services.py &
@@ -59,11 +54,11 @@ MCP_PID=$!
 # Setup cleanup trap before starting uvicorn
 trap "echo '🛑 Stopping services...'; kill $MCP_PID 2>/dev/null; exit 0" EXIT SIGTERM SIGINT
 
-# Step 4: Wait for services to initialize
+# Step 3: Wait for services to initialize
 echo "⏳ Waiting for MCP services to start..."
 sleep 3
 
-# Step 5: Start FastAPI server with uvicorn (this blocks)
+# Step 4: Start FastAPI server with uvicorn (this blocks)
 # Note: Container always uses port 8080 internally
 # The API_PORT env var only affects the host port mapping in docker-compose.yml
 echo "🌐 Starting FastAPI server on port 8080..."