How to trade Crypto on Kraken: a step-by-step guide for newcomers
The world of cryptocurrency can feel like a vast, uncharted ocean. It’s thrilling, full of potential, but also intimidating for new sailors. If you’re ready to hoist your sails and dive in, you need a reliable ship. For many, that vessel is Kraken.
Founded in 2011 and weathering every market storm since, Kraken has built a reputation as a secure, feature-rich, and professional exchange. This guide will be your map, leading you step-by-step through your first crypto trade on this trusted platform.
Step 1: Creating and verifying your Kraken account
Before you can trade, you need to board the ship.
- Sign up: Head to Kraken and click “Create Account.” You’ll need a valid email address and a strong password.
- Verification (the security check): This is crucial. Kraken uses tiers of verification:
-
- Starter (pro verification): Requires your name, date of birth, country, and phone number. This tier allows you to fund your account and trade with higher limits.
- Intermediate: Requires additional documentation like a government-issued ID and a photo of yourself. This unlocks higher deposit and withdrawal limits.
- Why so strict? This Know Your Customer (KYC) process is for everyone’s security, helping to prevent fraud and make the ecosystem safer.
Step 2: Funding your Kraken account
You can’t trade without funds! Kraken allows you to deposit both fiat currency (like USD, EUR, CAD) and cryptocurrency (like Bitcoin from another wallet).
Funding with Fiat (e.g., USD):
- Navigate to Funding > Deposit and search for USD.
- You’ll see several options, like Fedwire or SWIFT. Kraken will provide you with unique banking details. You then initiate a transfer from your bank account to Kraken’s. This can take a few business days.
Funding with Crypto (the faster way):
- Let’s say you want to deposit Bitcoin (BTC). Go to Funding > Deposit and search for BTC.
- Kraken will generate a unique deposit address—a long string of letters and numbers (or a QR code). CRITICAL: Always double-check that you are sending Bitcoin to a Bitcoin address. Sending crypto to the wrong type of address (e.g., sending ETH to a BTC address) will result in permanent loss.
Step 3: Understanding the Kraken account interface
Once your funds clear, head to the Trade tab. You’ll see a screen with charts, order books, and trading pairs. Don’t be intimidated! Let’s break down the key terms:
- Trading pair: This is what you’re trading. For example, BTC/USD means you are trading Bitcoin against the US Dollar.
- Order book: A real-time list of buy orders (bids) and sell orders (asks) from other traders. It shows the price and quantity.
- Chart: The price history of the asset. You can analyze this to inform your decisions.
- Order types: This is where the action happens.
Step 4: Your first trade on Kraken
Let’s imagine you’ve deposited $1,000 and have decided you want to buy Ethereum (ETH). The current price of ETH is $2,500.
Example 1: the market order (the simple approach)
A market order is an instruction to buy or sell immediately at the best available price.
- Your goal: Buy $500 worth of ETH right now.
- Your action:
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- Select the ETH/USD trading pair.
- Choose the market order type.
- In the “Spend” box, enter
500. - Click buy.
What happens? Kraken’s system instantly finds sellers willing to sell ETH at prices around $2,500. It might fill your order at $2,500.10, $2,499.95, etc., until your $500 is spent. You’ll receive approximately 0.2 ETH ($500 / $2,500).
➡ Forex risk management tools: automatic trading with popular market orders
Example 2: the limit order (the strategic approach)
A Limit Order is an instruction to buy or sell only at a specific price or better. This gives you control but requires patience.
- Your goal: Buy ETH, but you believe the price might dip to $2,450 soon.
- Your action:
-
- Select ETH/USD.
- Choose the limit order type.
- In the “Limit Price” box, enter
2450. - In the “Amount” box, enter how much ETH you want to buy, say
0.2. - Click Buy.
What happens? Your order is placed in the order book. If the market price drops to $2,450 (or lower), your order will be executed. If the price never drops to $2,450, your order will sit there unfilled until you cancel it or it expires.
Step 5: Selling your Crypto on Kraken
The same principles apply. Let’s say the price of your ETH has risen to $3,000.
- Market sell: You could place a market order to sell your 0.2 ETH immediately, netting you roughly $600 (a $100 profit).
- Limit sell: You could set a limit order to sell your 0.2 ETH only if the price hits $3,100, hoping for even more profit.
What else does Kraken offer?
Think of the standard Kraken trading interface as your reliable all-purpose tool—it’s perfect for getting the job done simply and efficiently. But as you grow more confident, you’ll discover that Kraken is more like a full financial workshop, packed with powerful tools for advanced strategies and earning passive income. Here’s a deeper look at what becomes available as you explore further.
1. Kraken Pro: the power user’s command center
If the main Kraken app is a comfortable sedan, Kraken Pro is a high-performance racing cockpit. It’s designed for traders who need speed, detailed information, and the lowest possible costs.
- Lower fees: This is the biggest draw. While the standard interface has a simplified fee structure (typically 0.26% for makers and takers), Kraken Pro uses a volume-based tiered system. This means the more you trade, the lower your fees get, which can start as low as 0.00% for makers and 0.10% for takers for high-volume traders. For a beginner making smaller trades, your fees will still be significantly lower than on the standard platform.
- Advanced charting tools: Forget a simple line graph. Kraken Pro offers professional-grade charts with a vast library of technical indicators (like RSI, MACD, and Bollinger Bands) and drawing tools. This allows you to perform detailed technical analysis to spot trends and potential price movements.
- Depth chart and order book: These elements are more prominent and interactive, giving you a real-time, visual representation of market sentiment and liquidity. You can see the exact walls of buy and sell orders, helping you make more informed decisions about where to place your own limit orders.
Who is it for? Anyone looking to reduce trading costs or who wants to graduate from simple “buy and sell” to analyzing market trends.
2. Staking: earn rewards for participating in the network
Staking is often described as earning interest, but it’s more like earning dividends for helping to run the network. Instead of letting your crypto sit idle in your account, you can “stake” it.
- How it works: Many modern cryptocurrencies (like Ethereum, Cardano [ADA], and Polkadot [DOT]) use a “Proof-of-Stake” system to validate transactions and secure their blockchain. By staking your coins, you are essentially locking them up to act as a validator or to delegate your voting power to a validator. In return for helping to keep the network secure and operational, you earn regular rewards, typically expressed as an annual percentage yield (APY).
- On Kraken: The platform makes this incredibly simple. You don’t need technical knowledge or to run your own server. With a few clicks, you can choose a coin to stake, and Kraken handles the complex backend operations. Your rewards are automatically distributed to your account. APYs can range from 2-5% for Ethereum to much higher for other assets.
Who is it for? Long-term holders who believe in a project’s future and want their assets to work for them instead of gathering digital dust.
3. Funding and lending: become the bank (for advanced users)
This is a more sophisticated feature that allows you to earn interest by providing liquidity to other traders on the margin market.
- The concept: Some traders want to borrow funds to amplify their trading positions (a practice known as margin trading). Kraken facilitates this by allowing other users to lend their assets to these traders.
- How you earn: You offer your idle USD or cryptocurrency (like BTC or ETH) to the margin funding market. Traders pay an hourly interest rate to borrow your funds. This rate fluctuates based on market demand. As a lender, you earn a steady stream of interest income for the duration of the loan.
- Important note: This carries more risk than staking. While Kraken has systems to manage this risk (like automatic liquidations if a borrower’s position fails), it is generally recommended for users who fully understand the mechanics of margin trading.
Who is it for? Experienced users with a high risk tolerance who are seeking ways to generate yield from their stablecoins or major cryptocurrencies in a more active, market-driven way.
Kraken review
After more than a decade in the crypto waters, how does Kraken stack up?
The good (the strengths):
- Top-tier security: Kraken has an impeccable security record. The vast majority of user funds are held in cold storage (offline), and the company undergoes regular proof-of-reserves audits. You can trust that your assets are safe.
- Reputation and reliability: It’s one of the oldest and most respected exchanges globally, known for its stability even during periods of extreme market volatility.
- Low fees: Especially on Kraken Pro, the fees are highly competitive.
- Wide asset selection: Offers a huge range of cryptocurrencies, far beyond just Bitcoin and Ethereum.
- Excellent customer support and education: Kraken provides an extensive learning library (Kraken Learn Center) and has a more responsive support system than many competitors.
Final anchor drop: Kraken is an exceptional choice for both beginners and serious traders. Its unwavering focus on security and regulatory compliance makes it a safe harbor in the often-wild crypto seas. While the initial learning curve might be slightly steeper than on some ultra-simplified apps, the control, low fees, and powerful tools you gain are well worth the effort.
For the beginner, start with the standard interface and market orders. As your confidence grows, graduate to Kraken Pro and limit orders. With Kraken as your exchange, you’re not just trading—you’re building a solid foundation for your entire crypto journey.
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How to Trade Crypto on Kraken - FAQ