Module 03

Strategy Pattern Recognition

Identifying and classifying the three primary strategy archetypes observable in Polymarket trading data, with detection signals and reverse-engineering feasibility.

Strategy Alpha

Cross-Exchange Arbitrage

Exploits price discrepancies between Polymarket and other prediction markets or correlated assets on traditional exchanges.

How It Works

The bot monitors prices on Polymarket, PredictIt, Betfair, Kalshi, and correlated assets on Binance/Coinbase simultaneously. When a price gap exceeds the transaction cost threshold, it executes simultaneous buy/sell orders to lock in risk-free profit.

Detection Signals

  • Trades consistently occur within seconds of price movements on other platforms
  • Trade sizes are precisely calculated to match cross-platform liquidity
  • Activity spikes during high-volatility events when price gaps widen
  • Wallet shows near-zero net exposure (hedged positions)
  • Extremely consistent small profits per trade with high frequency

Trade Signature

Rapid buy on Polymarket → simultaneous sell on Betfair/PredictIt. Trade sizes are mathematically precise, often to 4+ decimal places.
Example Logic
IF polymarket_price("Trump Wins") < betfair_price("Trump Wins") - fees
  AND spread > MIN_PROFIT_THRESHOLD (typically 0.5-2%)
THEN
  BUY on Polymarket at market_price
  SELL on Betfair at market_price
  SIZE = min(polymarket_liquidity, betfair_liquidity) * 0.8

Strategy Metrics

Reverse Engineerable Yes
Implementation DifficultyMedium
Profit SourcePrice inefficiency between platforms
Risk LevelLow (hedged)

Key Indicators

Execution: < 5 seconds
Win rate: ~95%+
Risk: Execution slippage
Quick Compare
Cross-Exchange
Automated
Directional