In this guide
What separates traders who generate steady returns from those treading water hinges far more on disciplined methodology than on raw forecasting ability. This checklist outlines the core habits that institutional-grade participants follow in their daily workflow.
Before Entering Any Position
- Articulate your edge: What insight gives you an advantage that the broader market lacks? Commit this to a single sentence before you commit capital.
- Check the spread: Does the gap between buy and sell prices leave room for your edge to overcome slippage and fees?
- Assess liquidity: Will you be able to unwind this trade at a reasonable price if circumstances demand it? Examine the order book carefully.
- Set your probability independently: Establish your own forecast in isolation, prior to examining what the market is pricing, to guard against anchoring.
- Calculate position size: Apply the half-Kelly criterion. Never exceed 5% of total capital on any single trade, regardless of confidence level.
During Position Management
- Update on new information: When material events unfold (speeches, economic reports, announcements), recalculate your odds and determine your next move—whether to accumulate, maintain, or liquidate.
- Don't check obsessively: Minute-to-minute swings are statistical noise. For markets with longer timeframes, a daily review suffices; intraday monitoring breeds reactive mistakes.
- Pre-define your exit criteria: Establish in advance the price level at which you will close the position if your thesis proves incorrect. This removes emotion from the decision.
After Each Market Resolves
- Record everything: Log the timestamp, market identifier, your forecast, entry price, final outcome, and realised gain or loss.
- Score your calibration: Did events you rated at 70% confidence actually occur roughly 70% of the time?
- Categorize by market type: Which domains—geopolitical, technology, sports—yield your strongest edge?
- Review your losers honestly: Distinguish between flawed reasoning and sound analysis that simply encountered unfavourable randomness.
Weekly Review Routine
- Reconcile all positions and P&L
- Calculate rolling 30-day and 90-day Brier scores
- Review upcoming calendar events (Fed meetings, elections, major data releases)
- Identify any systematic biases in your recent trading
- Rebalance portfolio allocation if needed
FAQ
- How often should I review my prediction market performance?
- A weekly cadence works best for the majority of traders. Reviewing daily tends to encourage excessive turnover; reviewing only monthly leaves gaps where corrective action could help.
- What software should I use to track prediction market trades?
- PolyGram's integrated portfolio dashboard provides a solid foundation. For deeper statistical work, export your trade log as CSV and process it through Excel, Google Sheets, or a Python script.
- How many markets should I research before entering each week?
- Depth of research matters far more than breadth. Thorough examination of 3-5 opportunities typically outperforms a superficial scan of 20.