Markets & Trading

Market Types

Binary Markets (YES/NO)

Characteristics:

• Two possible outcomes

• Simple to understand

• Most common type

• Price = implied probability

Examples:

✅ "Will Bitcoin reach $150,000 in 2025?"
✅ "Will Democrats win 2028 election?"
✅ "Will Ethereum ETF be approved?"

Multi-Outcome Markets

Characteristics:

• 3+ possible outcomes

• More complex analysis

• Higher potential returns

• Multiple positions possible

Examples:

✅ "Which team wins NBA Championship 2026?"
✅ "Bitcoin price range at end of year?"
✅ "Who will be next Fed Chair?"

Trading Strategies

1. Fundamental Analysis

Research-Based Trading:

Steps:

1. Gather information about the event

2. Assess probabilities objectively

3. Compare to market price

4. Trade when you find value

Example: Presidential Election

Research:
- Poll averages: 52% Democrat
- Historical trends
- Economic indicators
- Recent events

Market Price: $0.48 for Democrat
Your Analysis: 55% chance

Value: Yes (market underpricing by 7%)
Action: Buy Democrat shares

2. Technical Analysis

Price Pattern Trading:

Key Indicators:

• Price trends

• Volume spikes

• Support/resistance levels

• Moving averages

Example Chart Pattern:

Price History:
$0.40 → $0.50 → $0.45 → $0.55 → $0.52

Pattern: Uptrend with pullbacks
Support: $0.50
Resistance: $0.55

Strategy: Buy near $0.50, sell near $0.55

3. Event Trading

Trade on News & Events:

Types of Events:

• Scheduled (debates, earnings, reports)

• Unscheduled (breaking news, scandals)

Example: Debate Trading

Before Debate:
Candidate A: $0.55

During Debate:
Candidate A performs well
Price jumps to $0.60

Strategy: Buy before if you predict strong performance

4. Swing Trading

Short-Term Price Movements:

Approach:

1. Identify volatile markets

2. Buy on dips

3. Sell on rallies

4. Don't hold to resolution

Example:

Day 1: Buy at $0.50
Day 3: Price rises to $0.58
Day 3: Sell for 16% profit
Don't wait for resolution

5. Arbitrage

Risk-Free Profits:

Opportunities:

Type 1: Price Sum Arbitrage

YES: $0.55
NO: $0.48
Total: $1.03 (❌ Should be $1.00)

Arbitrage:
Buy both: -$1.03
Guaranteed payout: $1.00

Wait... this is a loss!
Actually need: YES + NO < $1.00

Correct Opportunity:
YES: $0.48
NO: $0.48
Total: $0.96

Buy both: -$0.96
Guaranteed payout: $1.00
Profit: $0.04 (4%)

Type 2: Cross-Market Arbitrage

Market A: Event X at $0.60
Market B: Not Event X at $0.45

These should inverse:
A + B should = $1.00
Actual: $1.05

Arbitrage opportunity exists

6. Portfolio Hedging

Reduce Risk:

Example:

You hold: 100 YES shares at $0.60
Market moves to: $0.75
Profit: $15 unrealized

Hedge:
Buy 100 NO shares at $0.25

Total cost: $60 + $25 = $85
Guaranteed payout: $100
Locked profit: $15

Advanced Trading Techniques

Position Sizing

Kelly Criterion Application:

Formula:

Bet Size = (Edge / Odds) × Bankroll

Edge = Your probability - Market probability
Odds = Potential return

Example:

Bankroll: $1,000
Market: YES at $0.60
Your belief: 75% chance

Edge: 0.75 - 0.60 = 0.15 (15%)
Odds: (1.00 - 0.60) / 0.60 = 0.67

Kelly: (0.15 / 0.67) × $1,000 = $224

Recommended: Half-Kelly = $112

Risk Management

Never Risk More Than:

• 5% per trade (conservative)

• 10% per trade (moderate)

• 20% per trade (aggressive)

Diversification Rules:

Minimum markets: 5-10
Maximum per category: 30%
Maximum correlated: 25%

Stop Loss Strategies:

If position loses 30% of value:
→ Sell 50% of position

If position loses 50% of value:
→ Sell entire position

Timing Strategies

When to Enter:

1. Early Entry (High Risk/Reward)

   • Right after market creation

   • Low prices

   • High potential profit

   • More uncertainty

2. Mid-Term Entry (Balanced)

   • After initial price discovery

   • More information available

   • Moderate prices

   • Balanced risk/reward

3. Late Entry (Low Risk/Reward)

   • Close to resolution

   • High certainty

   • Prices near $0 or $1

   • Limited profit potential

When to Exit:

1. Target Profit

   • Set profit goal (e.g., 20%)

   • Sell when reached

2. Stop Loss

   • Set maximum loss (e.g., -30%)

   • Automatic exit

3. Time-Based

   • Exit X days before resolution

   • Avoid last-minute volatility

4. Information-Based

   • New information changes your view

   • Exit immediately

Market Analysis

Volume Analysis

What Volume Tells You:

High Volume:

✅ High interest
✅ Good liquidity
✅ Tight spreads
✅ Reliable prices

Low Volume:

❌ Low interest
❌ Poor liquidity
❌ Wide spreads
❌ Less reliable prices

Volume Trends:

Increasing volume + rising price = Strong trend
Increasing volume + falling price = Strong decline
Decreasing volume = Trend weakening

Price History

Chart Patterns:

Uptrend:

    /
   /
  /
 /

Higher highs, higher lows
Bullish signal

Downtrend:

\
 \
  \
   \

Lower highs, lower lows
Bearish signal

Consolidation:

_____

Sideways movement
Indecision
Breakout coming

Sentiment Analysis

Gauge Market Sentiment:

1. Social Media

   • Twitter mentions

   • Reddit discussions

   • Discord activity

2. News Coverage

   • Mainstream media

   • Specialized publications

   • Blogs and analysts

3. Related Markets

   • Correlated events

   • Similar predictions

   • Industry trends

Market Categories Deep Dive

Politics Markets

Key Factors:

• Polling data

• Historical patterns

• Economic conditions

• Campaign events

• Scandals/controversies

Trading Tips:

✅ Follow poll aggregators (FiveThirtyEight, RealClearPolitics)
✅ Watch debate performances
✅ Monitor fundraising data
✅ Track early voting numbers
❌ Don't trade based on emotions

Crypto Markets

Key Factors:

• Technical analysis

• On-chain metrics

• Regulatory news

• Institutional adoption

• Market cycles

Trading Tips:

✅ Follow Bitcoin closely (market leader)
✅ Watch whale wallets
✅ Monitor exchange inflows/outflows
✅ Track regulatory developments
❌ Don't FOMO into pumps

Sports Markets

Key Factors:

• Team performance

• Player health/injuries

• Head-to-head records

• Home/away advantage

• Weather conditions

Trading Tips:

✅ Check injury reports
✅ Analyze team stats
✅ Consider rest days
✅ Watch line movements
❌ Don't bet on favorite teams emotionally

Business Markets

Key Factors:

• Financial statements

• Industry trends

• Competitive landscape

• Economic indicators

• Management quality

Trading Tips:

✅ Read earnings reports
✅ Follow analyst ratings
✅ Track economic data releases
✅ Monitor Fed decisions
❌ Don't trade on rumors

Common Mistakes to Avoid

1. Emotional Trading

Problem:

❌ Trading on feelings
❌ Revenge trading after losses
❌ FOMO (Fear of missing out)
❌ Panic selling

Solution:

✅ Create trading plan
✅ Stick to rules
✅ Take breaks after big wins/losses
✅ Keep trading journal

2. Over-Concentration

Problem:

❌ All money in one market
❌ Too many correlated positions
❌ Over-leveraging

Solution:

✅ Diversify across markets
✅ Limit position sizes
✅ Balance categories

3. Ignoring Fees

Problem:

❌ Not factoring in 2% platform fee
❌ Overtrading (network fees add up)
❌ Not calculating break-even

Solution:

✅ Calculate net returns
✅ Account for all fees
✅ Trade less frequently but better

4. Poor Timing

Problem:

❌ Buying near resolution at high prices
❌ Selling winners too early
❌ Holding losers too long

Solution:

✅ Plan entry/exit points
✅ Use stop losses
✅ Take partial profits

Trading Tools

Available on Veyra

Market Browser:

• Filter by category

• Sort by volume/price/date

• Search functionality

• Trending markets

Price Charts:

• Historical price data

• 30-day price history

• Multiple outcome comparison

• Volume overlay

Order Book:

• Bid/ask spreads

• Market depth

• Recent trades

• Liquidity indicators

Portfolio Dashboard:

• Active positions

• Unrealized P&L

• Realized P&L

• Performance metrics

External Tools

Research:

• Google News alerts

• Twitter lists

• Reddit tracking

• Specialized forums

Analysis:

• Spreadsheets for tracking

• Position sizing calculators

• Expected value calculators

• Trading journals

Performance Tracking

Key Metrics

Win Rate:

Win Rate = Winning Trades / Total Trades

Example:
20 winning trades / 30 total trades = 66.7%

Return on Investment:

ROI = (Final Value - Initial Investment) / Initial Investment

Example:
($1,200 - $1,000) / $1,000 = 20%

Sharpe Ratio:

Sharpe = (Return - Risk Free Rate) / Standard Deviation

Higher Sharpe = Better risk-adjusted returns

Trading Journal

Track Every Trade:

Date: 2025-11-01
Market: Bitcoin $150K?
Action: Buy YES
Shares: 50
Price: $0.68
Reasoning: Strong institutional adoption
Outcome: Pending
P&L: TBD

Review Monthly:

• What worked?

• What didn't work?

• Patterns in wins/losses?

• Areas to improve?

Pro Tips

From Successful Traders

💡 Tip 1: Start Small

"Trade small until you're consistently profitable. Size up slowly."

💡 Tip 2: Specialize

"Master one category before expanding. Be the expert."

💡 Tip 3: Be Patient

"Wait for high-conviction opportunities. Quality over quantity."

💡 Tip 4: Control Emotions

"The market doesn't care about your feelings. Stay objective."

💡 Tip 5: Learn Continuously

"Review every trade. Learn from mistakes. Improve constantly."

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Continue Learning:

• Portfolio Management - Optimize your positions

• API Reference - Automate your trading

• FAQ - Common questions answered