Trading on Prediction Markets

Trading event contracts requires a distinct mental model compared to trading equities or cryptocurrencies. In a prediction market, you are not investing in the long-term cash flow of a corporation. You are trading mathematical probabilities with hard, discrete expiration dates.

When a market resolves, the contract goes to exactly $1.00 (if true) or exactly $0.00 (if false). There is no "holding the bag" indefinitely; the thesis is either objectively proven or disproven by reality.

This section is divided into three core pillars: fundamentals, strategy, and risk management. The goal is not to promise easy profit. The goal is to help you understand pricing, execution, and risk clearly enough to trade with fewer avoidable mistakes.

1. Trading Fundamentals

Before deploying capital, it is imperative to understand how the plumbing of a prediction market dictates the price on the screen.

2. Trading Strategies

Trading strategy matters, but it should be framed cautiously. A structured process is usually better than impulse trading, but no strategy removes uncertainty.

3. Risk Management

The fastest way to lose money in prediction markets is ignoring correlated tail risks.

Who is this section for?

• Beginners: Start with Fundamentals, especially implied probability, order structure, and fees.
• Intermediate Traders: Move into Position Sizing and Risk Management before trying more complex strategies.
• Advanced Builders: Use the strategy pages as concepts, then connect them to the developer section for implementation detail.