📚 Polymarket Trading Guide

1️⃣ What is Polymarket?

Polymarket is a decentralized prediction market built on the Polygon blockchain. Users buy and sell shares in the outcomes of real-world events — elections, sports, crypto prices, and more.

Each contract trades between 0¢ and 100¢. If your prediction is correct, your shares pay out at $1.00. If wrong, they're worth $0.

Why Sports Markets?

Polymarket's sports markets are priced by retail bettors, not professional bookmakers. This creates inefficiencies that our scanner detects by comparing against Pinnacle — the sharpest sportsbook in the world.

2️⃣ Getting Started

3️⃣ Funding Your Account

Polymarket uses USDC on Polygon. There are several ways to deposit:

Option A: Deposit from Exchange

1. Buy USDC on Coinbase, Kraken, or any major exchange
2. Withdraw to your Polymarket wallet address
3. Important: Select Polygon network when withdrawing (not Ethereum mainnet)

Option B: Bridge from Ethereum

1. If you have USDC on Ethereum mainnet, use the Polygon Bridge
2. Bridge takes ~15-30 minutes

Option C: Buy Directly

Polymarket supports buying USDC directly with a card through MoonPay (higher fees).

4️⃣ How Edges Work

An edge is the difference between Polymarket's price and the "true" probability from Pinnacle's sharp lines.

When Pinnacle says something has a 52% chance but Polymarket sells it at 45¢, you're getting 7 cents of value on every share. Over many bets, this edge compounds into profit.

Why Trust Pinnacle?

Pinnacle is known as the "sharpest" sportsbook because they:

• Accept unlimited bet sizes from professional bettors
• Don't ban or limit winning players
• Have the lowest margins in the industry

Their lines represent the closest thing to "true odds" in sports betting.

5️⃣ Weather Markets

Polymarket offers daily temperature markets for cities around the world. Our scanner compares market prices against professional weather forecasts to find edges.

How Weather Edges Work

Each weather market has multiple temperature buckets (e.g., "52°F or higher", "48-49°F"). Our scanner:

1. Gets the forecast from Open-Meteo (professional weather data)
2. Calculates fair probability using forecast + uncertainty range
3. Compares to Polymarket prices to find mispriced buckets

Reading Weather Edges

Placing a Weather Trade

Weather Cities Covered

We scan temperature markets for: NYC, Chicago, Miami, Dallas, Atlanta, Seattle, London, Seoul, Ankara, Buenos Aires, Toronto, Wellington

6️⃣ Finance Markets

Polymarket offers daily and monthly stock price predictions for major companies. Our scanner uses options-implied volatility to calculate fair probabilities and find mispriced markets.

What We Scan

• Daily Stock Prices: NVDA, TSLA, META, GOOGL, MSFT, AAPL, AMZN — "Will NVDA close above on Feb 10?"
• Monthly Targets: "What will TSLA hit in February 2026?"
• S&P 500: Daily up/down and monthly price targets
• Commodities: Gold (GC), Silver (SI), Crude Oil (CL) monthly targets

How Finance Edges Work

We use the Black-Scholes model with implied volatility from options markets to calculate the fair probability of a stock reaching a certain price:

1. Get current price from Yahoo Finance
2. Get implied volatility from options markets (e.g., NVDA ~55%, TSLA ~60%)
3. Calculate fair probability using Black-Scholes N(d2)
4. Compare to Polymarket to find edges

Asset Emojis

• 💚 NVDA (NVIDIA)
• 🚗 TSLA (Tesla)
• 📘 META (Meta/Facebook)
• 🔍 GOOGL (Google/Alphabet)
• 🪟 MSFT (Microsoft)
• 🍎 AAPL (Apple)
• 📦 AMZN (Amazon)
• 📊 SPX (S&P 500)
• 🥇 Gold
• 🥈 Silver
• 🛢️ Crude Oil

7️⃣ Economics Markets

Polymarket has markets on Fed rate decisions, GDP growth, and recession odds. We compare these against CME FedWatch probabilities and economist consensus to find edges.

What We Scan

• Fed Rate Cuts 2026: "Will there be 0/1/2/3/4+ rate cuts in 2026?"
• GDP Growth: "Will GDP growth be below 0.5%?" "Between 0.5-1.0%?"
• Recession: "Will there be a recession by 2026?"

How Economics Edges Work

Unlike sports or weather where we have real-time data, economics edges use expert consensus:

1. CME FedWatch: Shows market-implied probabilities for Fed rate decisions
2. Economist Surveys: Bloomberg, WSJ, and Federal Reserve consensus forecasts
3. Compare to Polymarket: When Poly diverges from professional forecasts, that's edge

Data Sources

• FedWatch Tool: CME Group's probability calculator based on Fed Funds futures
• GDP Consensus: Blue Chip Economic Indicators, Philadelphia Fed Survey
• Recession Odds: New York Fed recession probability model

8️⃣ Crypto Markets

Polymarket offers daily crypto price targets for BTC and ETH. Our scanner compares market prices against Deribit options-implied probabilities to find edges.

How Crypto Edges Work

We use Black-Scholes N(d2) — the same formula options traders use to calculate the probability of an asset reaching a strike price:

1. Get current BTC/ETH price from live market data
2. Get implied volatility from Deribit options (the largest crypto derivatives exchange)
3. Calculate N(d2) — the risk-neutral probability of reaching each strike
4. Compare to Polymarket — when Poly misprices a strike, that's edge

What We Scan

• BTC Daily Strikes: "Will Bitcoin be above $X on [date]?" — multiple strike prices per day
• ETH Daily Strikes: "Will Ethereum be above $X on [date]?" — same structure

We scan all available strike markets every 60 seconds, comparing each one against Deribit's live options data.

Why Trust Deribit?

• Largest crypto options exchange — handles 90%+ of BTC/ETH options volume
• Professional participants — institutional desks, market makers, and sophisticated traders
• Real-time IV — implied volatility updates continuously based on actual options trades

Reading Crypto Edges

In this case, Deribit says there's only a 21.9% chance ETH hits $2,000, but Polymarket is pricing YES at 31% (69¢ NO). Buying NO at 69¢ gives you a 9.1% edge.

9️⃣ Placing Trades

1️⃣1️⃣ Confidence Indicators

Every edge on the dashboard includes a confidence badge that tells you how reliable we think the edge is. This helps you decide how much to bet — or whether to bet at all.

The Three Levels

• 🟢 High — Strong model, good liquidity, well-calibrated category. Size up with confidence.
• 🟡 Med — Decent confidence. Use normal position sizing.
• 🔴 Low — Weaker model or low liquidity. Consider smaller size or skip.

What Goes Into the Score

We calculate confidence from five factors:

1. Category track record — Finance edges (Black-Scholes model) score highest. Sports edges are improving with our new calibration.
2. Sport-specific accuracy — UFC edges (53.6% win rate) score higher than NBA (47.1%).
3. Edge size — Moderate edges (5-15%) are more reliable than extreme ones (25%+). If an edge looks "too good to be true," the model may be wrong.
4. Liquidity — High-volume markets have tighter spreads and more reliable prices.
5. Time to event — Edges closer to game time are more reliable because prices have had time to settle.

1️⃣2️⃣ Correlation Warnings

When you see a ⚡ purple badge next to an edge, it means that edge is correlated with other edges on the dashboard.

What Does "Correlated" Mean?

Correlated edges share a common risk factor. If one loses, the others are more likely to lose too. For example:

• 5 NBA edges on the same night — if the league's favorites all underperform, most of your edges lose together
• Multiple weather edges for the same date — a weather system can affect multiple cities
• Same-sport spread and moneyline — these are essentially the same bet expressed differently

How to Use Correlation Warnings

1. Reduce position size when you have multiple correlated edges. Instead of $100 each on 5 NBA edges, try $40 each.
2. Diversify across categories — mix sports edges with weather and finance edges for less correlation.
3. Pick the best one — if 5 NBA edges are correlated, take the one with the highest confidence badge instead of all 5.

1️⃣3️⃣ Model Accuracy (Brier Score)

EdgeScouts tracks its own prediction accuracy using the Brier Score — the same metric used by FiveThirtyEight, The Economist, and professional weather services.

You can view our live accuracy grades at edgescouts.com/accuracy.

What is the Brier Score?

The Brier Score measures how close our probability estimates are to what actually happens. It ranges from 0 (perfect) to 1 (completely wrong). Random guessing scores 0.250.

Our Grading Scale

• A (< 0.13) — Excellent. Institutional-grade calibration.
• B (< 0.20) — Strong. Reliably profitable edges.
• C (< 0.25) — Competitive. Edges have value but room to improve.
• D (< 0.30) — Needs work. Proceed with caution in this category.
• F (≥ 0.30) — Poor. We're actively fixing this model.

Why We Show This

Most trading tools don't grade themselves. We think that's wrong. If our models aren't working, you should know — and we should fix them.

The accuracy page breaks down performance by category, sport, and (for weather) by city. Use it to decide which edge types you trust most.

1️⃣4️⃣ Monte Carlo Confidence Intervals

Every edge on the dashboard includes a 90% confidence interval and a P(profitable) percentage — calculated using Monte Carlo simulation, the same technique used by quantitative trading desks.

What You'll See

This tells you:

• +8.0% — our best estimate of the edge
• 91% — there's a 91% chance the true edge is positive (profitable)
• -1.6% to +17.6% — the true edge is somewhere in this range with 90% confidence

How It Works

For every edge, we run 10,000 simulations:

1. Sample fair probability — our Pinnacle/forecast/options estimate has uncertainty. We model this with a normal distribution around our estimate.
2. Sample Polymarket price — the current price has uncertainty from bid-ask spread and liquidity.
3. Calculate edge for each simulation — fair probability minus Polymarket price.
4. Measure the distribution — the 5th and 95th percentiles give us the 90% CI.

How to Use It

Why Some Edges Have Wider CIs

• Low liquidity — wider Polymarket spread means more price uncertainty
• Weaker models — sports have more uncertainty than finance (Black-Scholes is tighter)
• Small edges — a 3% edge with ±5% uncertainty could easily be negative

1️⃣5️⃣ Strategy & Tips

Bankroll Management

• Don't bet more than 5% of your bankroll on a single edge
• Edges are statistical advantages, not guaranteed wins
• Expect variance — even 60% win rates have losing streaks

When to Trade

• Act fast — edges close within 1-4 hours as arbitrageurs correct the price
• Set Telegram alerts (Pro) for edges above your threshold
• Best edges often appear when lines first open or after injury news

What to Avoid

• Don't chase losses by increasing bet size
• Don't bet on edges below 6% — the juice eats into your profit
• Don't ignore line movement — if Pinnacle moves, the edge may be gone

1️⃣6️⃣ Risks & Disclaimers

Key Risks

• No guaranteed profits — edges represent statistical advantages, not certainties
• Smart contract risk — Polymarket runs on blockchain; bugs are possible
• Liquidity risk — large orders can move prices; you may not get the displayed price
• Resolution disputes — markets occasionally resolve incorrectly or get voided
• Regulatory risk — prediction market legality varies by jurisdiction

EdgeScouts provides information only. We are not financial advisors. Always do your own research and understand the risks before trading.