Prediction markets are astrology for the boys.
Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
11–20 of 107 posts
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#12I had a thesis two months ago that you could detect predictors with insider knowledge and ride their coat tails and spent some amount of time staring at the data and running some ML algos to detect them. I learned some things about the market during this time, but did not succeed in my detection algorithm.
* Polymarket is a bit more transparent with who placed what bet, so it's a good place to go to study winners.
* The most consistent Polymarket winner I saw was placing 95%+ odds many, many times a day.
* Most markets will have a surprisingly small liquidity, so if your edge is just 5% you won't make as much as a 5% edge in the stock market could make you. This is good in that it keeps the biggest fish out, but some big players seem to be using strategies based on holding the most chips.
* Paper trading in Polymarket/Kalshi is very different than paper trading in the stock market, because even a few grand in Polymarket/Kalshi can have a big impact in how other "traders" interact with you. The traditional paper trade validation -> unleash the bot strategy doesn't work. You need to real trade with real money and scale up while watching how the market responds.
EDIT: Bonus learning -- yes the market runs by getting fish into the system. That's why Kalshi is advertising so much, it attracts suckers for the professional to win from, all while Kalshi takes a percentage.
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#13> On Kalshi, too, losers vastly outnumber winners. Spokeswoman Elisabeth Diana said there are 2.9 unprofitable users for each profitable one based on data from the past month So 25% of users are profitable? That's vastly more than on financial sites - stocks/futures/forex/options trading where only 5% of bettors are profitable.
Are you confusing beating the market with being profitable?
The majority of active traders won't beat the market (e.g. the S&P 500). That doesn't mean they aren't profitable.
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#14I had a thesis two months ago that you could detect predictors with insider knowledge and ride their coat tails and spent some amount of time staring at the data and running some ML algos to detect them. I learned some things about the market during this time, but did not succeed in my detection algorithm. * Polymarket is a bit more transparent with who placed what bet, so it's a good place to go to study winners. *…
I used to play penny stocks for fun and it was a blast to be doing $3000 trades and be responsible for 30% of the volume for the day. You can learn a lot about how markets work if you adopt a penny stock, particularly the kind that trades in a wide range where you can buy in at 0.03 and figure "I'll sell when it hits 0.12" and sooner or later it does... then falls back down to 0.02.
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#15Prediction markets are astrology for the boys.
Astrology is magical thinking and fraud so it checks out.
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#16> "John Pederson outside the homeless shelter in Detroit where he has been living since losing money on Kalshi...Pederson lost $41,000 on a mention-market bet related to hip-hop artist A$AP Rocky in January"
> At first, it worked. Pederson turned about $2,000 into close to $8,000 by betting on daily snowfall totals in Detroit
I'm not a gambler, but when I consider it I think the worst thing that could happen to me would be to win a substantial but not life-changing amount of money. I think that's where most people get hooked. They get lucky once (or a few times), then get completely sucked in trying to replicate that success.
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#17People keep saying they provide the market with information, and that's the benefit of allowing the insider trading, but no one has pointed out how in any way society has benefitted from the insider trading instances so far...
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#18> On Kalshi, too, losers vastly outnumber winners. Spokeswoman Elisabeth Diana said there are 2.9 unprofitable users for each profitable one based on data from the past month So 25% of users are profitable? That's vastly more than on financial sites - stocks/futures/forex/options trading where only 5% of bettors are profitable.
Uhm, I'd like to introduce you to our Lord and Savior index funds. Simply buy vtsax and forget for 30 years.
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Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#19If by "sharks" you mean "inside traders" then yes.
Re: Why Almost Everyone Loses–Except a Few Sharks–On Prediction Markets
#20I had a thesis two months ago that you could detect predictors with insider knowledge and ride their coat tails and spent some amount of time staring at the data and running some ML algos to detect them. I learned some things about the market during this time, but did not succeed in my detection algorithm. * Polymarket is a bit more transparent with who placed what bet, so it's a good place to go to study winners. *…
> I learned some things about the market during this time, but did not succeed in my detection algorithm.
What failed? Was it too late to follow the trend by the time one was identified or something else? It seems much more transparent than trying to reason about say dark pool trades.