How to Build a Python Position-Sizing Engine for Polymarket Trading Bots
A profitable trading signal alone is insufficient for algorithmic trading on Polymarket; how much capital to risk is equally critical. Position sizing engines must account for estimated probability, market price, edge calculation, and execution costs before committing funds. The fractional Kelly criterion is recommended over full Kelly sizing, as it reduces risk when a model's confidence is uncertain. Liquidity caps and portfolio-level risk controls should further constrain individual position sizes to prevent overexposure. Developers are advised to validate all implementation details against Polymarket's official documentation before deploying any live capital.
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