Skip to main content

Market Selection

Master the art of selecting the right prediction markets for your PMF strategy.

Market Analysis Framework​

Fundamental Analysis​

  • Understand the underlying event or outcome
  • Analyze available information and data sources
  • Assess the probability of different outcomes
  • Consider timing and resolution criteria

Technical Analysis​

  • Review price history and trends
  • Analyze trading volume and liquidity
  • Identify support and resistance levels
  • Monitor market sentiment indicators

Selection Criteria​

Liquidity Requirements​

  • Ensure sufficient trading volume
  • Check bid-ask spreads
  • Verify market depth
  • Consider impact of your position size

Information Edge​

  • Identify markets where you have expertise
  • Look for mispriced opportunities
  • Consider information asymmetries
  • Evaluate your competitive advantage

Risk Factors​

  • Assess maximum potential loss
  • Consider correlation with other positions
  • Evaluate resolution timeline
  • Review market manipulation risks

Market Categories​

Political Markets​

  • Elections and political outcomes
  • Policy decisions and legislation
  • Approval ratings and polling data
  • International relations events

Sports Markets​

  • Game outcomes and championships
  • Player performance metrics
  • Season-long competitions
  • Tournament results

Economic Markets​

  • Economic indicators and data releases
  • Corporate earnings and announcements
  • Market performance predictions
  • Cryptocurrency and financial metrics

Entertainment Markets​

  • Award shows and competitions
  • Box office performance
  • Celebrity and pop culture events
  • Media and entertainment outcomes

Due Diligence Process​

Research Phase​

  • Gather relevant information and data
  • Identify key factors affecting outcomes
  • Analyze historical patterns and trends
  • Consult expert opinions and analysis

Risk Assessment​

  • Quantify potential losses
  • Evaluate correlation risks
  • Consider black swan events
  • Plan exit strategies

Position Sizing​

  • Calculate optimal position size
  • Consider portfolio impact
  • Apply risk management rules
  • Plan for position adjustments

Common Mistakes​

Over-Concentration​

  • Putting too much capital in single markets
  • Ignoring correlation between positions
  • Failing to diversify across categories
  • Not considering portfolio-level risk

Information Overload​

  • Trying to trade too many markets
  • Lacking deep expertise in chosen areas
  • Following crowd sentiment blindly
  • Ignoring fundamental analysis

Best Practices​

Focus on Your Edge​

  • Stick to markets where you have expertise
  • Develop deep knowledge in specific areas
  • Build information networks and sources
  • Continuously improve your analysis

Portfolio Construction​

  • Maintain appropriate diversification
  • Balance risk and return potential
  • Consider correlation between positions
  • Regular portfolio review and rebalancing

Tools and Resources​

Analysis Tools​

  • Market data and historical charts
  • News aggregation and analysis
  • Statistical modeling tools
  • Risk management calculators

Information Sources​

  • News and media outlets
  • Expert analysis and commentary
  • Social media sentiment
  • Official data and statistics

Next Steps​