Introduction
Trading bots are gaining popularity among investors with an emphasis on the cryptocurrency sector. This article talks about Telegram bots and how to use them.
What is Telegram?
Telegram is a social media platform that is based on direct messaging applications. Telegram uses end-to-end encryption that ensures privacy for users meaning that outsiders cannot read any conversation. Telegram was created by Pavel and Nikoli Durov. It was launched in August 2013.
What are Telegram Trading Bots?
Telegram trading bots are built-in automated protocols. They are used to perform trades on decentralized exchanges or DEX. Bots are automated algorithms that can make independent trading decisions based on trading data training.
Bots use machine learning and other data processing models to learn or emulate real-world functions.
Telegram trading bots allow users to interact with them using a simplified interface and messaging. Trading bots allow traders to pin stop-loss and take profits features.
At the same time, users can perform mirror trading and also maintain multi-wallet support. Thus far, Telegram bots have supported $283 million worth of data as per Binance research.
How to Use Telegram Trading Bots?
Telegram trading bots can connect with the decentralized exchanges, telegram accounts, and wallet addresses of a given user. Traders who have activated the bots may be able to perform automated trading using their trading channel. The user interface and user experience for these trading bots are easier to understand and navigate in comparison to Web3 wallets.
However, the dashboard for every trading bot can be unique in comparison to others based on its trading style. Telegram trading bots are used to snipe tokens meaning purchasing a new token as soon as it is launched on a connected DEX such as Uniswap.
It is important to note that based on the underlying design and mechanism each Telegram trading has a unique layout and command options.
How to Set Up a Telegram Trading Bot?
Here are some quick and simple ways to set up a Telegram Trading Bot:
- Visit the official site of the Telegram Trading bot services provider.
- Open the selected trading bot API in the Telegram chat and input the required commands as mentioned in the instructions panel.
- Create a new wallet or link an existing wallet address to the bot with the help of private keys.
- The best practice is to use a separate trading wallet for Telegram Trading bots.
- Add the necessary funds to the connected wallet that is attached to the Telegram Trading bot. The most common currency to use in this case is ETH.
- Users have the option to purchase tokens or borrow funds from lenders on DEX protocols. Bots can provide automated calculations for leverage, collateral, trading fees, gas charges, interest rates, and every other expense involved.
Top Use Cases of Telegram Trading Bots
Here are some important functions that Telegram Trading Bots can perform:
Buying and Selling Crypto
Telegram trading bots can perform buy and sell operations for specified crypto tokens. The bots may use the references provided by the traders in terms of analytical metrics or other discernable conditions.
As soon as these conditions are triggered, bots can automatically sell or purchase the highlighted tokens. These bots can also trade tokens based on the changes in profit and loss accumulated in a wallet address.
Stop-Loss and Set-Profit
Stop-loss is the method of creating a price threshold for a given trading position. This limit prevents losses by triggering the automated dissolution of the trading position before the loss can occur.
Stop-loss is also used to cash in the target profit which is called the take-profit feature. Telegram trading bots can automate both of these features.
Scam Detection
Trading bots can detect potential scam tokens that are vulnerable to issues like rug-pulls and honeypot frauds. Rug-pull is when the token issuer is trying to abandon the project after taking massive profits leaving others with losses.
Bots can detect projected transactions in the mempool that warn them regarding massive sell-offs and they dissolve any outstanding position before rug-pull takes place. Honeypots are malicious wallet addresses aiming to steal funds from honest traders.
Trading bots read any malicious transaction records and liquidate the position to avoid the trap.
Mirror Trading
Mirror trading is a trading strategy where investors look at the trading accounts of other investors and copy their moves. Telegram trading bots can make this process automated and very swift.
It means that the investors only need to provide the public wallet address of the trader they want to mirror and the bots will imitate all their trading moves.
Sniping
Sniping is the method of purchasing new tokens as soon as they enter the market. Buying early can maximize the profit-earning potential for investors. Traders can feed bots with necessary conditions to purchase new tokens, if these conditions are fulfilled bots can purchase or snipe newly listed tokens on DEXs.
Airdrop Farming
Airdrop farming is picking the best growth tokens out of all the new projects. Bots can do airdrop farming across multiple trading channels at a given time.
Conclusion
Telegram trading bots can increase the earning potential of investors by leaps. However, they have some risks associated with them such as asset security, smart contract risks, and technical expertise. Traders need to develop a good understanding of the market and programming to successfully operate these bots.
