Trading Strategies
This section is about how traders turn an opinion into a position.
Good strategy in prediction markets is not just about predicting the future. It is about finding mispriced contracts, sizing trades well, and knowing when a trade is not worth taking.
What this section covers
- How to size positions when you think a market is mispriced
- How to hedge exposure across related markets
- Where arbitrage comes from, and why it can disappear fast
- How execution speed matters in fast-moving markets
Key strategy pages
A practical way to think about strategy
Most useful strategies in prediction markets come from one of four edges:
- Information edge, where you understand the event better than the market
- Structural edge, where you understand pricing, rules, or correlations better than others
- Execution edge, where you get in or out faster and at a better price
- Discipline edge, where you size well and avoid emotional mistakes
If you cannot explain your edge clearly, it is usually not a strategy. It is just a guess.
What strategy does not fix
Even a good strategy cannot save you from poor liquidity, bad contract rules, or reckless position sizing. Strategy only works when it is paired with strong fundamentals and risk control.
FAQ
Is arbitrage common in prediction markets?
Small pricing gaps show up often, especially in fast markets or thin markets. Easy, risk-free arbitrage is much rarer than it looks.
Should beginners start with advanced strategies?
Usually no. Most people should learn pricing and execution first, then move to sizing and simple hedging.
What should I read next?
If you have not covered the basics, go back to Trading Fundamentals. If you already know the basics, continue to Risk Management.