Infinity Grid Trading Algorithm for the Kraken Exchange

Automated trading strategies have become essential tools for cryptocurrency traders seeking consistent performance in volatile markets. The kraken-infinity-grid is an advanced open-source algorithm designed specifically for the Kraken exchange, leveraging grid trading principles to systematically buy low and sell high across dynamic price movements.

Built using Python and powered by the python-kraken-sdk, this tool enables users to automate trades on Kraken’s Spot market with precision. It supports multiple trading strategies—including GridHODL, GridSell, SWING, and cDCA—giving traders flexibility based on their risk appetite and investment goals.

Disclaimer: This software was initially developed for private use and is not affiliated with or endorsed by Kraken or Payward Ltd. Users assume full responsibility for any risks, losses, or outcomes resulting from its usage. No guarantees are provided regarding performance, accuracy, or profitability.

How Grid Trading Works

At the core of the kraken-infinity-grid lies the grid trading strategy—a methodical approach that profits from market volatility by placing buy and sell orders at predetermined price intervals.

👉 Discover how automated grid trading can enhance your crypto strategy

Instead of predicting market direction, grid trading capitalizes on price oscillations. As prices move up and down within a range, the algorithm executes trades at each interval, capturing small but frequent gains.

For example:

• When the price drops, a buy order is triggered.
• When it rises, a corresponding sell order locks in profit.

This creates a self-sustaining cycle of accumulation and realization, especially effective in sideways or moderately volatile markets.

Key Components of Grid Trading

• Fixed Intervals: Orders are placed at regular percentage-based intervals (e.g., every 4%) above and below the current price.
• Quote-Based Positioning: Each trade uses a fixed amount of quote currency (e.g., $100 per trade), ensuring consistent exposure.
• Dynamic Adjustment: The grid shifts as prices move, maintaining relevance without manual intervention.

Available Trading Strategies

The kraken-infinity-grid offers four distinct strategies tailored to different trading styles and objectives.

GridHODL – Accumulate While Trading

GridHODL combines active trading with long-term accumulation. It places buy orders below the current price and automatically sets sell orders slightly above the purchase price.

• Mechanism: Buy low at descending intervals; sell portionally higher.
• Outcome: Gradual increase in base currency holdings (e.g., BTC) over time.
• Best For: Volatile or ranging markets where price fluctuates frequently.

Each completed cycle returns a small profit in quote currency while increasing net ownership of the base asset—ideal for bullish long-term outlooks.

GridSell – Realize Immediate Profits

Unlike GridHODL, GridSell fully liquidates the purchased amount upon each successful trade.

• Execution: After buying $100 worth of BTC at $48,000, it sells all BTC at a 4% markup (~$49,920).
• Advantage: Locks in profits instantly and resets capital for the next cycle.
• Use Case: Traders focused on short-term gains rather than asset accumulation.

This strategy reduces exposure during downturns and is optimal when holding assets carries higher risk.

SWING – Ride Bull Runs While Accumulating

SWING enhances GridHODL by detecting breakout trends and triggering partial or full sales when prices exceed historical buy levels.

• Breakout Detection: Monitors highest executed buy price (e.g., $60,000).
• Sell Trigger: If price hits $62,400 (4% above), it initiates sell orders.
• Dual Functionality: Continues buying on dips while selling on surges.

👉 Learn how swing-based automation improves profit capture in rising markets

This hybrid model maximizes returns during bull phases while preserving accumulation benefits in corrections.

cDCA – Custom Dollar-Cost Averaging

cDCA (Custom Dollar-Cost Averaging) focuses purely on long-term accumulation without selling.

• Interval-Based Buying: Purchases occur after every X% drop (e.g., 4%), not on a time schedule.
• No Sell Orders: All buys are held indefinitely.
• Adaptive Logic: As prices rise beyond set levels, new buy zones shift upward to stay active.

Perfect for investors who believe in long-term appreciation and want to average in efficiently across volatility.

Setup & Deployment Options

To run kraken-infinity-grid, you'll need API access to your Kraken account and a configured environment.

Prerequisites

1. Kraken API Keys
   Generate API keys via Kraken's dashboard with permissions for:

   • Order placement
   • Querying open orders
   • Account information access
2. Database Backend
   Supports both SQLite (simple setup) and PostgreSQL (recommended for stability).

3. Optional: Telegram Notifications
   Two bots are recommended:

   • One for routine updates (trades, status)
   • One for error alerts
     Use BotFather on Telegram to create bots and retrieve tokens/chat IDs.

Running the Algorithm

Option 1: Local Python Environment

python3 -m venv venv
source venv/bin/activate
pip install kraken-infinity-grid

Start with:

kraken-infinity-grid \
 --api-key YOUR_API_KEY \
 --secret-key YOUR_SECRET \
 run \
 --strategy "GridHODL" \
 --sqlite-file=/path/to/trading.db

Option 2: Docker Compose (Recommended)

Clone the repository:

git clone https://github.com/btschwertfeger/kraken-infinity-grid.git
cd kraken-infinity-grid

Build and run:

docker system prune -a
docker compose build --no-cache
docker compose up -d

The included docker-compose.yaml configures PostgreSQL automatically and ensures isolated, reproducible execution.

Monitoring & Risk Management

Real-time monitoring is crucial when running automated systems.

Track via Kraken Interface

All active orders and trades appear in your Kraken trading dashboard, allowing manual verification of bot activity.

Enable Telegram Alerts

Configure notification channels to receive instant updates:

• Trade executions
• System exceptions
• Connection issues

This improves oversight and enables rapid response if anomalies occur.

Risk Mitigation Best Practices

• Use dedicated API keys per bot instance to prevent nonce conflicts.
• Avoid running untested code from the master branch—stick to stable releases.
• Monitor Kraken’s maintenance schedule at status.kraken.com.
• Handle rate limits by checking your account tier; upgrade if necessary.

Frequently Asked Questions (FAQ)

Q: Is kraken-infinity-grid safe to use with real funds?
A: While functional, it's experimental software. Always test in simulation or with small amounts first. You assume all financial risk.

Q: Can I run multiple strategies simultaneously?
A: Yes, but use separate API keys for each instance to avoid nonce collisions and order conflicts.

Q: Does it support backtesting?
A: Limited tools exist in the tools/ directory, but full backtesting functionality is still under development.

Q: What happens if the bot crashes mid-trade?
A: Open orders remain on Kraken’s servers. Restarting the bot will resume monitoring. Docker auto-restart helps maintain uptime.

Q: How does it handle sudden market crashes or spikes?
A: The grid adjusts dynamically, but extreme moves may skip levels. Proper interval sizing reduces slippage risk.

Q: Can I modify the source code?
A: Yes—being open-source, it encourages customization. Just ensure changes don’t compromise security or logic integrity.

Final Notes on Usage & Development

The project follows semantic versioning:

• Major versions may include breaking changes.
• Minor versions add features without disruption.
• Patch updates fix bugs and improve reliability.

Always pin dependencies using at least major version numbers (e.g., kraken-infinity-grid==2.*) to maintain consistency.

While powerful, automated trading involves inherent risks. Never invest more than you can afford to lose. Market conditions change rapidly, and even well-designed algorithms can underperform during black swan events.

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The kraken-infinity-grid is a sophisticated tool for technically inclined traders aiming to harness volatility through structured automation. With proper configuration and cautious deployment, it can serve as a valuable component of a diversified crypto trading approach.