In this guide
Key takeaway: Prediction markets enable you to trade on outcomes of real-world events. Purchase YES or NO contracts that settle to $1 upon correct prediction. This approach is far less complex than equity trading, and you may begin with just $1.
Greetings to the world of prediction markets. Whenever you have remarked "I reckon that will occur" — you have already adopted the mindset of a prediction market participant. The distinction lies in the ability to commit actual capital to your belief and earn returns when your forecast proves accurate. This introductory guide to prediction markets will have you executing trades within five minutes flat.
How prediction markets work (the 60-second version)
Prediction markets establish tradeable propositions concerning upcoming events. As illustrations:
- "Will the Fed cut interest rates in June?" — YES contracts at $0.65, NO contracts at $0.35
- "Will Bitcoin close above $90K on December 31?" — YES contracts at $0.55, NO contracts at $0.45
- "Will France win the 2026 World Cup?" — YES contracts at $0.13, NO contracts at $0.87
Every contract settles to precisely $1 should the event materialise, or $0 if it does not occur. The prevailing market price embodies the collective probability assessment. Should you believe the market has mispriced the outcome, you may transact — and should your assessment prove correct, you realise profit.
Step 1: Choose a platform
The most prominent prediction market venues are:
- Polymarket — dominant in trading volume, blockchain-native (USDC on Polygon), accessible worldwide (excluding US)
- Kalshi — CFTC-authorised, dollar-denominated, restricted to US participants
PolyGram grants you entry to Polymarket's depth of liquidity with an intuitive user experience — email-based registration, no blockchain wallet required, and optimised for mobile devices. We suggest commencing with this option.
Step 2: Fund your account
Account funding through PolyGram proves effortless. Deposits may be made via debit card or blockchain transfer. Begin modestly — $10-50 suffices for initial transactions. Additional funds can be contributed whenever desired.
Step 3: Find a market you understand
The most frequent error among newcomers involves engaging with markets outside their domain of knowledge. Concentrate on sectors you monitor regularly:
- Interested in governance? Explore electoral prediction markets
- Interested in athletics? Participate in sporting event forecasts
- Interested in digital assets? Speculate on valuation thresholds
- Interested in innovation? Forecast technological milestones and policy outcomes
Step 4: Place your first trade
Visit PolyGram's markets page and identify a proposition where you believe the current valuation diverges from the genuine likelihood. Should the market price at 40% whilst you assess it at 60%, acquire YES contracts. Your gain upon accuracy: $1.00 - $0.40 = $0.60 per contract (representing a 150% gain).
Step 5: Manage your position
Upon acquisition, you face three distinct courses of action:
- Retain until settlement: Await the event's conclusion. Upon correct prediction, contracts automatically pay $1
- Liquidate ahead of schedule: Should pricing shift favourably before settlement, you may exit for profit without awaiting resolution
- Reduce exposure: If circumstances change your conviction, liquidate at a loss rather than await potential recovery
Risk management for beginners
- Restrict any individual market position to no more than 5% of your total capital
- Concentrate on well-traded markets (substantial activity, narrow bid-ask gaps) — sidestep obscure propositions with sparse participation
- Document your outcomes to identify patterns in your forecasting ability
- Keep in mind: even markets priced at 90% probability fail roughly once per ten occurrences
Prepared to execute your inaugural prediction market transaction? Begin trading on PolyGram →