Zub

It's been exactly 1 year since I started trading on Prediction Markets with just $1,000. In that timeframe I managed to compound my initial stake into a small fortune of ~$1.4M. I wanted to share a few thoughts about my journey and some lessons I learnt along the way. 1: PM's are like any good MMO- they are a social game first and foremost. Sure, you might be like Kirito and be capable enough to clear the early and mid-game by yourself. But the end game content- raids (ultra-liquid markets) is where all the fun is at, and you'll need a party you can trust to have your back to have a chance of beating them. Trust is earned, start building a rapport with intelligent and loyal people early on and those relationships will pay dividends for you in the future like you could never imagine. I attribute a lion's share of my profits to alpha from those in my "guild". 2: It's okay to be your own type of trader. Talk to and study enough whales and you'll come away thinking that the only way to earn a large sum in this game is to be okay with losing tens (or even hundreds) of thousands of dollars! It is perhaps optimal purely mathematically to make slightly +EV bets whenever they present themselves and risk a significant chunk of your bankroll, but when you also consider the loss in life EV of not being able to sleep or trade due to tilt for 3 weeks after a large 5 figure loss (trust me I've been there) & the risk of ruin if this is your primary source of income, the case for being more conservative and going heavy only when the edge is very large becomes a lot stronger. Obviously, this depends on your personality, there are people on this site who would probably be the next Alex Honnold's of the world if PM's weren't a thing and can sleep off a $200K loss as a cost of business, and that's okay too. 3: Be results oriented, but also sensible. In PM's its almost impossible to "prove" your edge with an individual position unless the market is mechanical in nature. You have to unscientifically derive it through intuition and a comprehensive knowledge of the field of play, which is developed through studying and playing similar markets over and over and over again. After a certain point, you should start to trust yourself with these intuitions if you are consistently making profits. But conversely, do not fall for the noob trap of mistaking positive variance for edge. You see this all the time with retail punting on random sports or crypto bets where they're paying 4% in spread + fees, win half a dozen times in a row and think they're infallible. Then they size up and their next bet loses and they chase their losses until they have nothing. A more sophisticated example of this is bonding. I personally was up a ton buying 99% stuff, and just assumed that my edge was close to 1%. It turns out when you play the same market 1,000 times weird stuff is going to happen, and when adverse selection is in play half of your profits are wiped out in a single moment of oversight, software bug or misclick. My actual edge in these spots is probably closer to 0.5%, but I didn't know that for months of trading because those edge cases never had the chance to present themselves. A more public example of this is the Michigan/WMU game where combo sellers (bots) thought they were selling 1c shares for a game that had already been lost due to Kalshi making an error with the resolution of the game. They were quickly rinsed for ~$10M by humans who were shrewd enough to figure out what was going on. They were made whole by the exchange, clawing back funds, but how many times had they sold combos like that with nothing going wrong? Probably tens of thousands of times, and all it would have took was one and a different executive decision for many of them to have lost it all. 4: Most interestingly of all, I learnt that you don't need to be particularly smart to make a life changing amount of money in this space. I don't think too highly of myself in that regard (I couldn't even land an internship in college!!) but I was able to do it. Similarly I've met people who are doing very well on PM's who are just regular Joe's who have a good attitude about learning. I perhaps have always been quite interested in "trading" as a mechanical concept but that's about the only advantage I suspect I had going into this. Don't underestimate yourself, whether it be with this or in any aspect of your life, you have no idea how quickly things can move in your favour!