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Setup Guide - Kraken Automated Trading Bot

Prerequisites

  • Python 3.8+ installed on your system
  • Kraken account with API access enabled
  • Git (optional, for cloning the repository)

Installation Steps

1. Clone or Download the Project

git clone <repository-url>
cd TradingBot

2. Create a Virtual Environment (Recommended)

On Windows (PowerShell):

python -m venv venv
.\venv\Scripts\Activate.ps1

On macOS/Linux:

python3 -m venv venv
source venv/bin/activate

3. Install Dependencies

pip install -r requirements.txt

4. Configure Kraken API Credentials

Step 1: Create .env File from Template

Copy the .env.example file to .env:

On Windows (PowerShell):

Copy-Item .env.example .env

On macOS/Linux:

cp .env.example .env

Step 2: Add Your Credentials

Open the .env file and add your Kraken API credentials:

KRAKEN_API_KEY=your_actual_api_key_here
KRAKEN_API_SECRET=your_actual_api_secret_here

✅ Security: The .env file is automatically ignored by git (see .gitignore), so your credentials will never be accidentally committed.

Alternative: Using Environment Variables

If you prefer not to use a .env file:

On Windows (PowerShell):

$env:KRAKEN_API_KEY = "your_api_key_here"
$env:KRAKEN_API_SECRET = "your_api_secret_here"

On macOS/Linux:

export KRAKEN_API_KEY="your_api_key_here"
export KRAKEN_API_SECRET="your_api_secret_here"

5. Generate Kraken API Key

  1. Log in to your Kraken account
  2. Go to Settings → API
  3. Click "Generate New Key"
  4. Configure permissions:
    • ✓ Query Funds
    • ✓ Query Open Orders & Trades
    • ✓ Query Closed Orders & Trades
    • ✓ Create & Modify Orders
    • ✓ Cancel/Close Orders
  5. Copy your API Key and Private Key

Running the Bot

Test API Connection

python main.py --test

This will verify your API credentials and connectivity.

Run Backtesting Mode

python main.py --backtest

This mode analyzes historical data without placing real trades. Requires historical price data in data/historical_prices.csv.

Run Live Trading Mode

python main.py

⚠️ Warning: This will place real trades on your Kraken account using actual funds. Make sure your configuration is correct before running.

Configuration

Edit config.toml to customize:

  • Trading Pair: trade_pair (default: "XBTEUR" — EUR pairs recommended; check config.toml for exact symbols)
  • Trade Volume: trade_volume (amount per trade)
  • Risk Settings: Stop-loss and drawdown limits
  • Logging: Log level and output path

Directory Structure

TradingBot/
├── main.py                 # Entry point
├── trading_bot.py          # Core trading logic
├── kraken_interface.py     # Kraken API wrapper
├── analysis.py             # Technical analysis indicators
├── utils.py                # Helper functions
├── config.toml             # Configuration file
├── requirements.txt        # Python dependencies
├── logs/                   # Log files directory
├── data/                   # Historical data directory
└── reports/                # Trade reports directory

Technical Indicators

The bot uses the following technical analysis indicators:

  • RSI (Relative Strength Index): Identifies overbought/oversold conditions

    • BUY when RSI < 30 (oversold)
    • SELL when RSI > 70 (overbought)

  • SMA (Simple Moving Average): Identifies trend direction

    • Short-term SMA (20 periods)
    • Long-term SMA (50 periods)

Troubleshooting

Import Errors

ModuleNotFoundError: No module named 'krakenex'

Solution: Run pip install -r requirements.txt

API Connection Failed

ERROR:kraken_interface:Error fetching account balance: Either key or secret is not set!

Solution: Check your API credentials in environment variables or config.toml

Permission Errors

API Error: EAPI:Invalid key

Solution: Verify API key has required permissions enabled on Kraken

Rate Limiting

EAPI:EAPI:Rate limit exceeded

Solution: Wait a few seconds. The bot has built-in rate limiting (0.5s between calls).

Security Best Practices

  1. ✓ Always use environment variables for API credentials
  2. ✓ Never commit credentials to version control
  3. ✓ Use API keys with minimal required permissions
  4. ✓ Enable IP whitelisting on your Kraken API key
  5. ✓ Monitor your account regularly
  6. ✓ Start with small trade volumes for testing
  7. ✓ Use stop-loss orders to limit potential losses

Monitoring & Logs

Logs are saved to logs/bot_activity.log. Monitor this file for:

  • Trading signals and orders
  • API errors and warnings
  • Performance metrics

View logs in real-time:

# On Windows (PowerShell)
Get-Content logs/bot_activity.log -Tail 20 -Wait

# On macOS/Linux
tail -f logs/bot_activity.log

Next Steps

  1. Implement Backtesting: Add historical data to data/ folder
  2. Add More Indicators: Extend the analysis.py module with MACD, Bollinger Bands, etc.
  3. Risk Management: Implement position sizing and portfolio rebalancing
  4. Reporting: Generate trade performance reports
  5. Deployment: Set up on a VPS for 24/7 operation

Support & Resources

Disclaimer

Trading cryptocurrencies involves significant risk. This bot is provided as-is for educational purposes. The developers are not responsible for financial losses. Always:

  • Test thoroughly before using real funds
  • Use appropriate risk management
  • Comply with local regulations
  • Never invest more than you can afford to lose

Last Updated: February 19, 2026