> For the complete documentation index, see [llms.txt](https://docs.dexlens.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.dexlens.io/oldpages/polymarket-multi-strategy-trading-bot.md). # Polymarket Multi-Strategy Trading Bot ## Polymarket Multi-Strategy Trading Bot Automated prediction market trading bot for [Polymarket](https://polymarket.com) with multi-strategy architecture, AI-powered crowd simulation, and self-evolving parameter optimization. ### Performance | Metric | Value | | ----------------------- | -------------------------------------------- | | Weather strategy (best) | +$2,323 PnL, 63.4% WR, 325 trades | | Golden era (Mar 3-14) | +$1,908, 72% WR, $159/day | | Perplexity API savings | $57+ via local Ollama LLM | | Strategies | 10 built, 3 active (focus > diversification) | ### Architecture ``` ┌─────────────────────────────────────────────────────────┐ │ ORCHESTRATOR │ │ Market scanning → Signal validation → Risk management │ ├─────────────┬───────────────┬───────────────────────────┤ │ STRATEGIES │ AI LAYER │ DATA PIPELINE │ │ │ │ │ │ Weather │ 4096-Agent │ REST API (Gamma/CLOB) │ │ Sniper │ Crowd Sim │ WebSocket (real-time) │ │ Econ Data │ Deep Research│ SQLite WAL (storage) │ │ Crowd Sport│ Bayesian │ Market lifecycle │ │ │ Updating │ VWAP / Flow analysis │ ├─────────────┴───────────────┴───────────────────────────┤ │ RISK MANAGEMENT │ │ Quarter Kelly · Triple Barrier · EV Gate · Base Rates │ ├─────────────────────────────────────────────────────────┤ │ SELF-EVOLVING OPTIMIZER │ │ Genetic Programming · Meta-Optimizer · Auto-Compound │ └─────────────────────────────────────────────────────────┘ ``` ### Strategies #### Active | Strategy | Description | Edge Source | | --------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------- | | **Weather** | BUY\_NO on temperature range markets | Multi-source forecast divergence (WU + OpenMeteo) | | **Resolution Sniper** | Near risk-free resolution sniping | UMA oracle + local LLM verification | | **Econ Data Sniper** | Trade on BLS data releases within \~1s | Polls BLS page at 100ms, parses headline number | | **Crowd Sport** | 50-agent Delphi simulation on sport markets | 10 specialist groups, 3-round consensus | | **Crowd Prediction** | 4096-agent hierarchical simulation on politics/crypto/geopolitics/entertainment | 64 groups → 16 panels → 4 summits → consensus | #### Key Design Decisions (from 112K wallet study) * **Specialize**: Focus on 1-2 categories (+$4,200 avg) instead of 5+ (-$2,100 avg) * **Quarter Kelly**: Never risk more than 25% of Kelly optimal * **Price-based exits**: Sell on price movement (18-72h hold), don't wait for resolution * **Min edge 8%**: Top 1% enter at 8-10% deviation from consensus * **Never negative EV**: Strict EV ≥ 0.10 gate on all entries ### Core Formulas ```python # 1. Expected Value — decides every entry EV = win_prob × payoff_ratio - (1 - win_prob) # must be ≥ 0.10 # 2. Bayes — chains evidence updates P(H|E) = P(E|H) · P(H) / P(E) # 3. Kelly — position sizing f* = (p · b − q) / b × 0.25 # quarter Kelly # 4. Base Rate — the invisible edge edge = base_rate - market_price # trade when |edge| > 8% # 5. KL-Divergence — arbitrage scanner D_KL(P‖Q) = Σ Pᵢ · ln(Pᵢ / Qᵢ) # finds mispriced correlated markets ``` ### Tech Stack #### Trading * **Polymarket CLOB** — order execution (Builder Program, gasless) * **Horizon SDK** — TWAP/VWAP/Iceberg for large orders * **PMXT** — cross-platform scanning (Polymarket + Kalshi) #### AI / ML * **DeepSeek V3** — crowd simulations via LiteLLM proxy (\~$0.001/call) * **Ollama** (qwen2.5:0.5b) — local LLM for resolution verification * **all-minilm** — market embeddings for correlation clustering * **TSFresh** — automatic feature extraction for meta-labeler * **Prophet** — PnL forecasting with weekly seasonality * **ARCH** — GARCH/EGARCH/GJR volatility modeling #### Data * **Unusual Whales** — congress trades, dark pool, insider signals, crypto whales * **FRED** — economic data (NFP, unemployment, CPI consensus) * **ESPN** — sport statistics for crowd simulations * **SQLite WAL** — structured storage with idempotent writes #### Risk * **Riskfolio-lib** — CVaR/MVO/HRP portfolio optimization * **VectorBt** — vectorized backtesting (5-10x faster optimizer) * **PyFolio** — tearsheet analytics (Sharpe, Sortino, drawdown) ### Self-Evolving System The bot evolves its own optimization function: ``` AutoOptimizer v4.0 — Self-Evolving Scoring Genome ┌────────────────────────────────────────────────┐ │ ScoringGenome (15 mutable coefficients) │ │ wr_base, wr_scale, wr_center, wr_range │ │ pf_base, pf_scale, pf_center, pf_range │ │ vol_norm, vol_exp │ │ pnl_exp, wr_exp, pf_exp │ │ simplicity_floor, drift_tolerance │ ├────────────────────────────────────────────────┤ │ Meta-Optimizer (genetic programming) │ │ Population: 12 genome variants │ │ Selection: test PnL (not genome score) │ │ Generations: 5 per run, 2x/day │ │ Result: genome that produces best REAL params │ └────────────────────────────────────────────────┘ ``` ### Setup ```bash # Clone git clone https://github.com/ludovicocapuano-dev/polymarket-bot.git cd polymarket-bot # Configure cp .env.example .env # Edit .env with your API keys # Run (paper trading) python3 bot.py # Run (live — requires confirmation) echo 'CONFERMO' | python3 bot.py --live ``` #### Required API Keys * Polymarket CLOB (private key + API credentials) * DeepSeek (for crowd simulations) * Unusual Whales (for signal intelligence) #### Optional * Anthropic (for premium simulations) * Horizon SDK (for advanced execution) * FRED (for economic data) * Zep Cloud (for MiroFish memory) ### Cron Jobs | Schedule | Task | | ----------------------------------- | -------------------------------- | | 4x/day (00:23, 06:23, 12:23, 18:23) | AutoOptimizer + meta-evolve | | 2x/day (08:00, 20:00) | GitHub repo monitoring (8 repos) | | 1x/day (04:00) | AutoContext bridge | ### Monitored Repositories * karpathy/autoresearch * hyperspaceai/agi * greyhaven-ai/autocontext * 666ghj/MiroFish * MiroMindAI/MiroThinker * polymarket/polymarket-cli * polymarket/py-clob-client * polymarket/py-builder-signing-sdk ### Key Lessons Learned 1. **Reserve floor must scale with real capital** — caused trading stall when floor > USDC 2. **Weather works with golden-era params** (5-8% min edge) — don't over-tighten 3. **BLS blocks bots** without browser User-Agent — need Chrome headers 4. **Favorite-longshot bias doesn't work** on Polymarket (alpha too low, 0% WR) 5. **MiroFish full simulation is too slow** for trading — Delphi hierarchical is 1000x faster 6. **112K wallet study**: specialize, quarter Kelly, price exits, never negative EV 7. **75% of Polymarket markets resolve NO** — structural tailwind for BUY\_NO strategies ### License Private repository. All rights reserved. *** *Built with* [*Claude Code*](https://claude.ai/claude-code)