How to Run a Long/Short Strategy on an Exchange That Doesn’t Allow Shorting
Since Kraken does not support shorting, traders can sell assets for cash on short signals and rebuy later. Another approach is to use two accounts, where one handles long trades and another supports shorting.
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Kraken Pro now supports spot-margin shorting for eligible users and pairs, so the article now distinguishes true shorting from its still-valid cash-account workaround.
Can You Short on Kraken Using TradersPost?
Kraken Pro supports traditional shorting through spot margin for eligible users and pairs1. Traders using cash accounts can instead sell their holdings for cash when a short signal appears and buying back later when a long signal is triggered2. This effectively mimics a short position in a cash-only account.
For example:
• If a trader holds BTC and a short signal appears, TradersPost can sell the BTC for USD instead of opening a short position.
• When the next buy signal appears, the system buys BTC back using USD, creating a long-only strategy that responds to both buy and sell signals.
Configuring TradersPost for Long-Only Execution
To implement this strategy in TradersPost:
• Enable “Bullish Only” mode in your strategy subscription settings.
• This setting ensures that buy signals enter a long position, while sell signals exit the position rather than opening a short.
Alternative: Using Two Separate Accounts for Long and Short
If traders want to maintain a true long/short strategy, they can:
1. Use one broker for long trades (e.g., Kraken).
2. Use another broker that supports shorting for short trades.
3. Configure separate strategy subscriptions in TradersPost so that buy signals execute on the long account and sell signals open a short in the shorting account.
This approach allows traders to run a reversal strategy, where:
• The long account is always long.
• The short account is always short.
• TradersPost switches positions between the two accounts based on signals.
Conclusion
While Kraken Pro supports traditional shorting on margin for eligible users and pairs, traders can sell assets for cash on sell signals to replicate shorting in a long-only account1. Alternatively, using two broker accounts—one for longs and one for shorts—lets traders fully automate long/short strategies through TradersPost.
References
1 Short Selling on Kraken Pro | CFTC-Regulated Spot Margin
2 support.kraken.com, Margin trading terms & concepts FAQ
