Crypto Trading 101: Leading Telegram Trading Bots

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INTRODUCTION

Telegram trading bots are publicly available or privately used bots for trading cryptocurrency that run via the popular messaging app Telegram. These bots serve as tools for traders to efficiently execute buys and sells, and can also track market data directly within the Telegram interface.

Telegram bots have existed since 2021, but only became popular among retail traders in early 2023. Traders typically use them to trade on a decentralized exchange (DEX) because they offer fast execution at quoted prices, whereas trading manually often leads to discrepancies between the quoted price and execution price.

In this guide, we’ll look at the types of Telegram bots used by traders & review 6 of the most popular ones.

WHAT ARE TELEGRAM TRADING BOTS?

Telegram trading bots are automated tools for crypto trading integrated into the Telegram messaging application. These bots allow users to execute trades in a fast and efficient manner directly within the Telegram interface. Telegram bots are generally available either for free or for a fee. One can also code their own. These bots have various functionalities:

WHAT TYPES OF TELEGRAM TRADING BOTS EXIST?

There are three major types of Telegram trading bots: wallet tracking bots, price tracking bots, and execution bots.

WALLET TRACKING BOTS

Wallet tracking bots help traders monitor specific wallet addresses across various blockchain networks, including Ethereum, Solana, BNB Chain, and many others. These bots provide real-time notifications to traders regarding activities within the designated wallets, enabling them to track and react to other traders’ moves. Traders typically do this to learn from other successful traders, or directly copytrade them. Arkham alerts are one example.

PRICE TRACKING BOTS

Price tracking bots allow traders to be notified on Telegram of significant price action or of the price hitting preset targets. 

TRADE EXECUTION BOTS

These bots allow traders to execute on-chain buys and sells more efficiently than with a browser-based wallet & DEX platform. Top traders in memecoins or other hyper-volatile markets overwhelmingly make use of these to trade efficiently at quoted prices.

TRADING STRATEGIES USING TELEGRAM BOTS

SNIPING LAUNCHES

Buying tokens  the moment they launch is not manually possible. Trading bots help traders ‘snipe’ these token launches milliseconds after launching. Sniping can be broken down into a few parts:

1. Identifying Potential Tokens: Traders monitor newly created token contracts to evaluate if they will snipe them or not. Evaluation varies by a trader’s personal strategy and risk tolerance.
   
   
2. Configuration of a Bot: The trader can pre-configure sniping options such as builder tip, token amount, gas fees, deadblocks and many other specifics. There is no specific universal configuration - each trader has different sniping preferences and strategies.
   
   
3. Risk Management: Sniping comes with risks like smart contract vulnerabilities and the potential for rug pulls (scams in which developers abandon projects and run away with investors' funds by removing liquidity from the liquidity pool). Traders can configure their bots to help protect them from scams. One example would be to turn on a bot function that sells before a malicious developer removes liquidity. Another option is to prevent a buy from going through if the token is unsellable or has very high taxes (above 90%, for instance).

COPYTRADING

Another common Telegram trading bot strategy is to automatically copy the moves of another trader. To prepare for copy trading, users first find target wallets by studying successful on-chain traders. Tools like Arkham can help with this.

After identifying a target wallet, the copy trader chooses if they want to copy the buys, sells, or both of the desired wallet. Traders can also choose the amount/type of trades they wish to copy, gas fees and token tax tolerance (if the taxes of a token are too high, the bot does not copy trade).
Another option with copy trading is “front running”, whereby users execute copy trades before the original trade. This is possible in crypto because transactions are broadcasted to the network before they are fully executed.

AIRDROP FARMING

A crypto airdrop is an event in which free tokens or coins are distributed to many addresses as part of a marketing campaign by a crypto project or company.

To execute trades that qualify users for an airdrop, some traders use an automated telegram trading bot that helps them reach this goal. Airdrop farming bots can work across various chains and can perform automated buys and sells across different user wallets to help traders attempt to qualify for an airdrop opportunity.

THE PROS AND CONS OF TELEGRAM TRADING BOTS

PROS

1. Automation:
   
   Telegram bots allow users to automate trades, making their life easier and allowing them to trade even when AFK. If Ethereum's price is $2300, a trader might want to buy ETH if the price goes down to $2,000.. However, this might happen when they are unavailable. Hence the trader uses a bot to automatically execute the purchase once the price target is met. This can be set up for many tokens and chains simultaneously using a Telegram bot.
   
   
2. Customization:
   
   Telegram trading bots usually have numerous customization features to assist traders in fine-tuning their trading strategies. Common options include builder tip (a specified amount allocated to the blockchain builder to prioritize a trader's transaction within a block), anti-rug, slippage, automatic approval for token sales, and the maximum tax threshold that a user is willing to accept for buying and/or selling.
   
   
3. Separating Discretion/Emotion from Trades
   
   Emotions can interfere with a trader’s decision-making, as fear and greed are strong sentiments that can negatively affect performance. Bots can strip this element away, as it is preprogrammed to buy or sell according to preset conditions and settings.
   
   
4. Accessibility:
   
   Telegram bots are accessible & allow users to trade from any location using any device that supports Telegram. This means that less sophisticated traders can make use of the familiar Telegram UI to execute complex bot trading strategies, which are typically the preserve of elite algorithmic traders employed by quantitative hedge funds.

CONS

1. Security:
   
   When utilizing a commercial bot, traders rely on the integrity and competence of the bot team because the Telegram bot has access to the funds in the linked wallet. Telegram bots have been hacked in the past and user funds stolen. To protect themselves, some users retain only what they can afford to lose on their Telegram-linked wallet and transfer profits to a secure wallet post-trade. Another security issue arises if the Telegram account is compromised. Furthermore, if the commercial bot is exploited due to faulty code, funds may also be vulnerable to theft.
   
   
2. Technical Complications:
   
   Utilizing a bot entails familiarizing oneself with its documentation and understanding the array of settings and tools available. Each bot features a unique user interface, necessitating users to adapt accordingly. There is often a learning curve and an adjustment period to become comfortable with the bot. This learning process can be costly if a mistake leads to significant losses
   
   
3. Cost:
   
   Commercial bots typically impose either a trading fee or a subscription fee, which may not be suitable for all traders. For instance, a trader selling $100,000 worth of a token through a bot that levies a 1% fee might find it more economical to use an exchange, as exchanges typically have lower overall fees.
   
   
4. Manipulation:
   
   A nefarious bot developer could monitor successful or insider traders and exploit their buy orders ahead of time to capitalize on the opportunity. Ultimately, since the developer may have access to users' wallets, trades, and Telegram usernames, they possess the means to execute such actions covertly.

A COMPARISON OF THE LEADING TELEGRAM TRADING BOTS

Below is a comparison of some of the most prominent Telegram bots which gives an overview of which may be more suitable for certain trades:

Note: We don’t endorse the use of any of the below trading bots. These are simply given for illustrative purposes - use these at your own risk.

MAESTRO

Maestro bot is the leading bot by transaction volume. It has amassed a large user base and runs on 3 chains: Ethereum, Binance Smart Chain (BSC), and Arbitrum (Ethereum Layer 2).

With Maestro, a trader can copy trade, snipe tokens at launch, snipe a presale (secure a position in a presale), buy via Telegram without interacting with a DEX, buy via private transaction (protection against MEV sandwich bots), set limit orders for buys and sells, and scrape call channels (Telegram channels that share token contract addresses) to buy whichever token those channels mention. After a user buys a token, a trade monitor pops up showing how much the token is worth, and how much a user will gain or lose after selling, after taxes and price impact.

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Moreover, Maestro allows for multiple wallets as well as a paid premium account that gives faster sniping at launch and an easier method to snipe those tokens. Maestro charges no upfront cost, but rather a 1% fee per transaction. The bot accumulates the fee and automatically withdraws it to Maestro’s wallet when it reaches 0.01 ETH or 0.01BNB.

Certain users opt for Maestro due to its publicly known developer and track record (operating since 2021).,.  Many are also attracted by the many features and customizable settings, including limit buy and sell options,  a trade monitor, and intuitive user interface.

BANANA GUN

Banana Gun is another leading trading bot. Unlike Maestro, the Banana Gun developers launched their own token, BANANA, which grants holders of the token a share of Banana Gun’s revenue. Banana Gun runs on Ethereum and Solana.

The Banana Gun bot imposes a 1% fee on Solana transactions, a 1% fee on Ethereum sniping, and a 0.5% fee on manual trades and limit orders. Banana Gun offers auto-sniping launches, limit orders and manual buys. Traders can learn more about setting up Banana Gun through their official documentation.

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Some traders prefer Banana Gun owing to their very active community, user interface, relatively low trading fees, and sniping speed (some traders claim Banana Gun comes first in a block).  

READYSWAP

ReadySwap offers a variety of Telegram bots (trading, scanning & tracking) as well as a web application for trading and monitoring tokens on Ethereum, BNB Chain, Arbitrum and Solana. The bot allows users to snipe tokens, set limit orders and auto-trade (buy a token by simply forwarding a message to the bot). The bot charges a 1% fee per trade.

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Fans of ReadySwap prefer using it over other bots owing to the speed of sniping and buying, and because it has a dedicated web app in addition to Telegram functionality.

UNIBOT

Unibot is one of the most prominent Telegram bots and offers manual buys and sells, limit orders, copy trading, token sniping, token scanners (simulates a token to check if it is malicious, as well as taxes and holder count), profit and loss analysis and private transactions to protect against MEV bots. They also have their own token, UNIBOT, which distributes some trading bot revenues to token holders. Unibot received extensive attention when their team announced revenue sharing. This revenue sharing model has since been copied by other bot projects.

Unibot offers a “fail guard”, which is a setting that simulates transactions to predict the likelihood of success or failure, helping traders avoid wasting gas fees on likely-to-fail transactions. It also has a web application and the team reportedly plan to add support for futures trading and DeFi in the future.

BONK Bot

Developed by the BONK community, BONK Bot allows trading of any SPL token on Solana. Traders can simply insert a contract address and rapidly purchase a token. To increase speed, users can preset certain criteria before purchase, such as slippage and a tip. Routing is powered by the Jupiter DEX.

Users of BONK Bot can buy, sell, and manage their trade by viewing their profit and loss, wallet balance and token market cap. Furthermore, the bot offers protection against MEV for users who prioritize safety over speed, as anti-MEV transactions are typically slower than normal ones.

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BONK Bot also has a referral system that allows users to receive a small percentage from the trades of their referred users. The fee for using the bot is 1% per transaction. BONK Bot was the first commercial Solana Telegram trading bot and is still widely used.

WAGIE BOT

Wagie bot lets users trade on Ethereum, BNB Chain, Arbitrum and Solana. Traders can use the bot to buy and sell, snipe launches, copy trade and set limit orders. The bot imposes a 0.8% fee on each transaction. If a trader swaps between ETH and stable coins (USDC, DAI, USDT), Wagie does not charge a fee. Their fee is one of the lowest amongst commercial bots, and can be decreased to 0.4% per transaction if the trader reaches a certain tier of usage.

CONCLUSION

Telegram bots offer traders a powerful tool for automating their trades. Bots offer numerous features and customizable settings for a fast and efficient way to trade. Commercial Telegram bot quality has improved a lot since they started being used in 2021 - developers are likely to continue finding new & innovative use cases for them as the market develops.