How to Build a Mean Reversion Trading Bot for Polymarket in Python
A technical guide published on DEV Community outlines how to build an algorithmic trading bot for Polymarket, the blockchain-based prediction market platform, using Python. The strategy is based on mean reversion, a quantitative approach that looks for outcome-token prices that have drifted unusually far from their recent statistical range and may return toward the mean. The bot uses rolling z-scores calculated from historical price data, alongside Polymarket's CLOB order-book API, to generate and filter trading signals. The guide emphasizes separating the signal research layer from execution and risk management to avoid mispricing errors caused by genuine market-moving news. It also covers backtesting, paper trading, and practical concerns such as fees, liquidity, and adverse selection.
This is an AI-generated summary. ShortSingh links to the original source for the complete article.


Discussion (0)
Log in to join the discussion and vote.
Log in