In this guide
What separates traders who achieve steady gains from those treading water or facing losses is rarely about forecasting ability alone—it hinges on disciplined methodology and systematic execution. This guide outlines the core routines that institutional-grade market participants follow in their daily workflow.
Before Entering Any Position
- Articulate your edge: What insight do you possess that remains unavailable to the broader market? Commit this reasoning to a single declarative statement prior to every trade.
- Check the spread: Does the gap between buy and sell prices remain tight enough that your analytical advantage offsets trading friction?
- Assess liquidity: Would you be able to unwind this exposure at a favourable price should circumstances demand it? Examine the depth of available orders.
- Set your probability independently: Establish your forecast in isolation, before consulting market quotations, to sidestep the anchoring trap.
- Calculate position size: Apply the half-Kelly criterion. Never risk more than 5% of total capital on any single wager, irrespective of confidence level.
During Position Management
- Update on new information: As material events unfold (speeches, economic indicators, breaking news), reassess your probability and determine whether to scale in, maintain, or liquidate.
- Don't check obsessively: Intraday volatility constitutes statistical noise. Monitor holdings on a daily cadence for markets with extended timeframes, not minute-by-minute.
- Pre-define your exit criteria: At what price point will you close the position if your thesis deteriorates? Lock this threshold in advance to bypass reactive, emotion-driven choices.
After Each Market Resolves
- Record everything: Timestamp, market identifier, your forecast, entry price, final outcome, realised gain or loss
- Score your calibration: Did your 70% confidence trades materialise at roughly 70% frequency?
- Categorize by market type: Do your returns vary meaningfully across geopolitical, digital asset, or athletic prediction domains?
- Review your losers honestly: Did this loss stem from flawed methodology or simply variance despite sound reasoning?
Weekly Review Routine
- Reconcile all open positions and cumulative returns
- Calculate rolling 30-day and 90-day Brier scores
- Survey the forthcoming event calendar (central bank announcements, electoral cycles, significant economic data)
- Detect any recurring patterns or tendencies in your recent activity
- Adjust portfolio weightings if warranted
FAQ
- How often should I review my prediction market performance?
- A weekly cadence suits the majority of participants. Reviewing daily encourages excessive trading activity; reviewing only monthly creates blind spots for tactical adjustments.
- What software should I use to track prediction market trades?
- PolyGram's integrated portfolio management system provides a solid foundation. For deeper statistical work, export your transaction log as CSV and process the data through spreadsheet applications or scripting languages.
- How many markets should I research before entering each week?
- Depth of analysis outweighs breadth of coverage. Conducting rigorous due diligence on 3-5 opportunities typically yields superior returns compared to cursory examination of dozens.