Should you trust trading signals on Telegram?

The volatility of the Bitcoin exchange rate and other coins attracted investors and scammers to the cryptocurrency market. There are many channels on Telegram where traders share crypto trading ideas. Some can generate income. Others deliberately manipulate to defraud subscribers and steal their money.

• A user who logs into the channel sees a series of deals and tips that have worked without loss of profit. Because of this, he may have an unreasonable trust in the owners of the group. To achieve this effect, the administrators of some channels give several trading signals to buy or sell coins. They can remove tips with a negative result from history.
• Another way to attract customers is to send a message about a successful transaction in a closed paid group to the main channel. In this case, the only way for users to learn about unsuccessful trading signals recommendations is to buy a subscription and see for themselves. Using these methods, certain channels form imaginary positive statistics, earning the trust of the audience. Subsequently, her loyalty and desire to make quick money can become a tool for manipulation and deception.

What are crypto trading signals?

Cryptocurrency trading signals are a symbiosis of insider information about future changes in the exchange rate for certain coins and analysis of the cryptocurrency market. Most often, these are forecasts based on someone’s analytical work. Much less often, it is insider information taken from major crypto market players.

Thanks to good crypto signals:

• You can reduce the risks. This is more than a useful feature, since, despite the possibility of super profit, there is an equally high probability of losing all your money. Using the right signals will help you defend against most bad trades. Simply put, the chances of losing money are less, and you are more likely to earn money.
• Transition to automation. Using signals allows you to discard all the routine work that traders do not like. The user just needs to follow the direction that the crypto signal sets, creating a lot of free time.
• Allows you to get rid of doubts. Exchange transactions are often associated with an emotional component. Traders do not want to build complex schemes of work but are guided by emotions. Because of this, it is not always possible to win. And having before your eyes a clear guide to action, created by a team of professionals, all doubts are discarded because there is a clear and logically built strategy. It remains only to use it. Besides, any stressful components are excluded here.

VIP groups with trading signals

Subscriber loyalty can be leveraged in a variety of ways. For example, to sell a paid subscription to a VIP channel.

• Unscrupulous traders create the illusion of big earnings to lure new users into private groups. They provide trading signals for buying and selling various assets and other financial recommendations.
• How high-quality they are is a separate question. But if the group owner is more important to make money on the sale of subscriptions and not on crypto trading, then the signals will not work. Another scheme is they can simply copy them from random free channels.
• Another way to make money on the audience is trust management. It works as follows: the channel administrator takes control of a certain amount in the cryptocurrency because he will trade it and keep a fixed percentage of the profit for himself. An unscrupulous trader divides the received coins into two halves. Each of them is used to open both long and short positions at the same time. Therefore, no matter what happens to the rate of the asset, one of the transactions will be profitable. The attacker will receive his percentage, but someone will be left without their money. For the channel owner, who was originally going to deceive subscribers, this does not matter. As a rule, attackers refuse to be held responsible for failures even at the stage of concluding a deal.

The transfer of cryptocurrency into trust is often formalized in words. Gullible but inexperienced crypto investors give away coins, guided by the trader’s reputation, promises of large profits, on the recommendation of friends, and other reasons.

In this case, if the trustee loses capital or turns out to be a fraud and steals money, it will not work to ask him. Therefore, capital should be given to management by well-known people and only with the execution of an appropriate agreement.

Pumps and arbitration

Some channels can arrange pumps, in addition to providing paid services, such as access to VIP groups and trust management.

• Subscribers are invited to buy a certain coin. The name of which is revealed at the last moment, seconds before the start of the promotion. As soon as this happens, the participants of the pump purchase the altcoin en masse in the hope of an instant increase in its rate. The asset may rise in price, but it is mainly the organizers who make money on this, while the subscribers are left with a cryptocurrency with a dubious future. In other words, channel administrators who want to make money on their subscribers buy an illiquid coin, artificially inflate its rate, and after a while, organize a pump to get rid of it. If the price of a cryptocurrency skyrockets seriously, the attackers benefit from this in a double way; they earned on the audience and received a plus in statistics.
• Another but similar way to manipulate subscribers is through arbitration. The channel gives a trading signal to buy an asset on one exchange, hoping to resell it profitably on another. Data from aggregators can be cited as confirmation. Similar services, like exchanges, show the price of assets for the last deal and not for open orders to buy or sell. The attacker uses this in the following way:

1. Buys an illiquid altcoin and transfers it to crypto exchange A, where its price is higher than the market average, say by 10%.
2. Site B artificially inflates the asset rate, for example, by 50%. You need to find a crypto exchange with a small number of open orders to sell altcoin and buy it at a high price, which the aggregator will fix.
3. He reports in his channel about the difference in the cost of cryptocurrency on sites A and B and, accordingly, the opportunity to make money.
4. As a result, subscribers buy the coin at an inflated price from the channel administrator on exchange A. When they transfer the asset to platform B, it turns out that it can only be sold at the market rate, at a loss.

How to choose the right channel with trading signals?

Not all crypto trading channels on Telegram aim to deceive and steal from subscribers. You should resort to careful analysis to not fall on the hook of an attacker and give money to the wrong hands.

• You should be suspicious of groups that promise guaranteed multiple profits.
• Make sure that the channel owners are trading and making a profit from it. Often, dishonest traders only report transactions, and as evidence, they attach someone else’s screenshots or screenshots tweaked in Photoshop.

• Watch if unprofitable recommendations disappear from the channel history. For example, if there was a signal to buy Bitcoin at $10,000, and after a while, it dropped significantly in price, then a conscientious administrator will write about an unsuccessful transaction. Otherwise, the recommendation will be ignored or deleted.
• Learn about the channel’s reputation. If subscribers were once deceived into losing money due to incorrect trading signals, you might be able to find information about this in other groups or on the Internet.

If a crypto investor decides to give his cryptocurrency in trust, it is imperative that:

• You find out reliable information about the identity of the channel administrators, names, and addresses; it will not be superfluous to request a personal meeting.
• Look for complaints about these traders on the internet or other channels. As practice shows, even the smallest criminal schemes emerge in the crypto trading community.
• Conclude an agreement with the prescribed conditions and risks, double-check it with trusted lawyers.