Polymarket Trading Bots: Strategies That Work (and Don't)

When it comes to Polymarket bots, many people want to make money with them, and rightfully so, because they are very profitable if you find the right strategy.

I've tried to create Polymarket bots myself, and unfortunately I wasn't able to make a profit with them. I tried many, many different things and none of them actually made money. In fact, I did make money for a while, but then it slowly turned negative.

So here are the things that I tried, and how I think they could potentially make you money if you try them yourself.

On Polymarket, latency is everything

First, Polymarket is a big platform used by many users, which means you have latency issues. Polymarket is not designed to be used as an API platform or as a trading terminal. Their focus is on the user experience on the website. So on the website you get the best performance and the fastest updates. But when it comes to receiving data on whoever is making bets, whoever is buying or selling, you will face delays. Your performance will depend on how fast you can get data and how fast you can send it.

It's just like Ethereum, where your goal is to land in milliseconds so your transaction gets processed and your bundle actually lands. On Polymarket you face the same issue. You have to be fast, extremely fast, even more than on Ethereum or Solana, because trades are made in milliseconds and whoever is the fastest will make the most money.

Bot #1: The latency arbitrage bot

That's why the first bot that I tried is a latency arbitrage bot. The idea is to get information on the buys and sells on the up and down bets, and make an educated decision before someone else does, before they move the market. Because yes, there are copy traders on Polymarket that simply copy profitable wallets, and people that copy strategies from others even though they don't fully understand them.

In my case I was participating in the crypto five-minute markets, where you bet on whether Bitcoin will be up at the end of the five minutes. There are 15-minute ones too. When the market starts, the target line is placed. If Bitcoin closes above that initial price and you bet up, you win. If it closes below, you lose.

So with this bot we observe the price of Bitcoin and compare it to the price shown on Polymarket, because they use their own source. We try to get the Bitcoin price before Polymarket does, or at least as fast as Polymarket, and place a bet whenever it moves a significant amount above or below the target line, so that we are on the right side of the market.

It's very simple. You're trying to buy up before Polymarket users notice that the market moved up, either because there is a delay in the oracle that supplies the Bitcoin price, or because people haven't noticed yet. If you are a regular user, you observe the market and you see, okay, price is going up, let me buy now. But by the time you click buy, the bots already noticed that move and bought a proportional amount. If it's a small move, they make a small bet. If it's a big move, they make a bigger bet. That's why the price goes from 50 cents to maybe 80 cents in a second or two.

And when you run the numbers on previous markets, you observe that, okay, whenever Bitcoin moves 100 dollars, there is an 80% likelihood that it closes above the target line. That's where mathematics and data come into play.

The data problem: CLOB and WebSockets

The bot wasn't successful. I tried many times to make it work, and one of the issues I ran into is that I wasn't getting reliable data. Polymarket doesn't want people to get the fastest data from the platform, because it puts a strong strain on their servers and they simply don't gain anything from it.

So I had to be creative. Polymarket's official way to provide data to people that want to trade on the platform is the CLOB. The problem with the CLOB is that it's slow. It's like making a GET or POST request to a server. There's also a WebSocket way to do it, which is usually faster because it updates you in real time. But it's very unreliable. It disconnects you every so often. I guess whenever the server detects that there are too many people in, it disconnects you, you have to reconnect, and those small interruptions add up and cause your bot to not perform at its best.

So what we did, me and other people, is simply set up multiple connections, like 20 WebSocket connections. Whenever one drops, we get the data from another one. Since it updates every few milliseconds, we take the price from all of those connections and average it, and that gives us a more realistic and reliable price.

I solved it, then it broke again, I solved it again and tried again. It's very frustrating to know that I'm getting data from Polymarket, but it's not the fastest, it's dropping all the time, and no matter how many fixes I make it's not really stable. So eventually I just moved on. I made some profit and lost some profit, and I didn't really make much money with the latency arbitrage bot. To be fair, it's one of the simplest strategies and it's not that effective.

Bot #2: The sum bot (buying both up and down)

Then there is the sum bot, or however it's called, I don't know the exact name. You take the up price and the down price and you add them together. If the total is less than one dollar, there is an arbitrage opportunity where you buy both up and down and you're guaranteed a profit.

Let's say it's 40 cents to buy up and 40 cents to buy down. Together that's 80 cents, 20 cents less than one dollar. One of the two sides always pays out one dollar, so you lock in 20 cents of profit for every 80 cents you put in. If you put 100 dollars on up and 100 dollars on down, you get 250 shares of each, and whichever side wins pays you 250 dollars for the 200 you spent.

It's one of the most commonly known bots. People on Twitter used to talk about it a lot, not so much anymore, because it was very successful and very profitable for a few people. I didn't really get into it myself because I was focused on other bots, so I cannot tell you if it's still that successful. But from what I observed, many people got into that strategy and the gaps became very small. There were very few markets with a significant difference between the up and down price, and they were not easy to capture. It's very competitive, many people know about it, and of course they implement it their own way.

Don't forget about slippage

You've also got to keep slippage in mind with these bots. When you buy a big amount, you enter at whatever price you can get based on the liquidity. If there's 100 dollars of liquidity and you buy 100 dollars, you will not enter at 50 cents. You will move the price up to maybe 90 cents, and your average entry will be around 70 cents. So the price says 50, but you're really buying at 70 because of the liquidity.

Which Polymarket market should you pick?

Polymarket has many different markets: crypto, weather, sports, politics and other predictions. Polymarket bot developers usually choose one of those and try to make a profit on it. So which one is the best? Where can you make the most money?

Weather bots

I've seen people make money with weather bots. What they do is somehow get information on what the weather will be like in a given location before other people. It's again a latency and information arbitrage opportunity. If you know that the temperature is going to hit 30 degrees somewhere and right now it's approaching 29 degrees, you can bet on that and make a profit because you got the information faster.

The problem with weather stations is that they publish data maybe once every 10 minutes or every five minutes. It's very random, and the data is not available in real time. Maybe there are some real-time sources out there that are faster than anyone else, even faster than the weather stations, but I haven't found them.

Or you can go further and go to the location and measure the weather yourself. That can give you an advantage. But keep in mind that in those weather markets Polymarket uses the official reading of a specific weather station. So you, or someone working with you, would have to be physically at that location to get the exact reading the station is going to report.

If you observe the real data in these markets, you will see that some bots are getting the readings faster than the official weather stations publish them. I'm not sure how they're doing it, but they definitely have some source that gives them data faster than other people. So if you can get weather data faster than anyone else, you will make money. But again, it's a very competitive market.

Sports bots

With sports, one way to go about it is going to the events yourself. If there is a basketball match, you watch it with your own eyes and bet on the real-time results.

But there are data services that provide millisecond updates, even before you can click the button yourself. I believe Bloomberg Terminal is one of them, though I'm not sure it covers this. So even if you are there in person, watching the ball go into the rim, there are services that deliver that information faster, in fractions of a second, because it really makes a difference. Sports betting is not a new thing. Bettors want the results of a match as soon as possible, because that lets them make the right decisions on who will win or how many points will be scored.

So it's possible to win, but it requires a level of sophistication and access that not many people are willing to go through. You have to spend time looking for the best data source, and you will usually have to pay thousands, if not hundreds of thousands of dollars a month or a year to get access, because those services are extremely fast, faster than you can blink. And they are profitable, that's why they are expensive. Whoever has access to them can know the result of a play faster than anyone else, and that moves a lot of money.

There are other markets that I haven't gotten into. The truth is you never know, because it really takes a while to figure out what advantage you have in any given market. So when it comes to making money with Polymarket, you have to look for those opportunities, and it depends on the market.

Bot #3: Trading analysis on the 5 and 15-minute markets

I focused on crypto markets only, because I like the periodicity of them. Every five or 15 minutes you can make a decision and know where the market will be going. So I tried multiple strategies there.

One of them was taking the 15-minute Bitcoin market, comparing it to the five-minute Bitcoin market, and applying the same trading analysis you use on Forex or crypto: trend lines, imbalances, liquidity sweeps, breakers, order blocks and so on. You apply it to the 15-minute market, then observe the five-minute market. Say on the 15-minute chart we're approaching an order block or a demand area where we expect a small bounce to the upside. If the five-minute market is right at the beginning of that bounce, you can be fairly confident your bet should be up. It's just basic trading analysis and price reading.

I think I was a bit successful with that, but I didn't pay much attention to it because it's difficult to implement. You need a system that actually reads the chart and automates your own strategies.

Bot #4: The fair value bot

One of the strategies that I loved personally is the fair value bot. This bot is fascinating. It observes every single price of Bitcoin and asks: when Bitcoin was 20 dollars above the target line, how likely was it to end up above the target line?

Let's say the market starts at 50/50 up and down, with Bitcoin right on the target line, and it jumps 20 dollars above the target line. What is the fair value of the up bet now? If we look at all the past times where Bitcoin started at the target line and moved 20 dollars up, and we see that it closed up 60% of the time, then the fair value of up is 60 cents.

So if Bitcoin moved 20 dollars but the up bet is only at 55 cents, you buy, all the way up to 60 cents. Because based on your own analysis, on thousands of past markets where Bitcoin made that same move, you know it has a 60% chance of winning. That's the fair value arbitrage.

And you can make interesting predictions with it, like if Bitcoin moves 100 dollars there is an 80% chance. You can also factor in time. If Bitcoin moves 20 dollars up right at the beginning of the five-minute market, the chances of winning are lower than if it moves those same 20 dollars when there are 30 seconds left. With 30 seconds left the fair value will be 90% or more, simply because the market is about to close.

I spent a long time developing that. I gathered as much data as possible by capturing the price and the bets constantly in real time and storing them in a database, so I could recreate previous markets and ask questions like: in all the five-minute markets we captured, whenever Bitcoin moved 100 dollars down right at the three-minute mark, how did it close? What are the chances? What is the fair value?

I tried that for a long time and I didn't get good results, because it requires a big data set and my data wasn't as clean as I wanted. Furthermore, it's not a very solid strategy, because you don't look at the overall market structure. You don't know where Bitcoin is on the one-hour or the 15-minute chart. It could be in a supply block or a demand block. You don't see the higher time frame structure, which can move the price of Bitcoin one way or another. So the edge was not that big. I kept it running, but I didn't really use it more.

Bot #5: The trader analysis bot

One of the most fascinating bots I built analyzed every single trader on Polymarket, observing their behavior to predict how they're going to trade so that we could front-run them. At the end of the day you are competing against other people, and your goal is to get money from them, just like they are trying to do with you.

I extracted all the trades made on the five-minute Bitcoin market, and for repeat traders I observed how they behave: what times they trade, their overall position size, what coins they trade, when they exit, how long they hold, and whether they close whenever there's a big move in price.

All of these observations give you an edge. If you know that a trader always trades at 5 p.m., right when they get out of work or whatever, places a bet for 10 minutes and forgets about it until the next hour, then you understand how that trader moves. If you can observe all the other traders too, you can know where the overall market goes. If you know that 10 people are about to buy at a given time, you know it's a good time to buy before them.

It's a very advanced type of bot. I call it a prediction bot. You need as much data as possible, and you use AI to analyze it. The AI was very effective at reading the data and saying, okay, for this particular user we have a confidence score of 60, we know he enters trades at this given time. But it was never really useful for me, to be honest.

I also tried combining it with the latency arbitrage bot and the fair value bot to create one score that says whether it makes sense to buy or sell at any given time, based on how other people are behaving, what the fair value is, and what the latency is. As many data points as possible. But realistically none of them made a difference.

And that's because the data is not clean. If we had, let's say, 10,000 trades from a thousand traders, we could extract very strong conclusions, repeated patterns and behaviors, and make good trading decisions from that. But people on Polymarket don't trade that much, and the data is very clouded. They trade some days, open random positions, or don't trade at all. They don't have a clear pattern of behavior, so it's not easy to make predictions. And trust me, I tried. I really spent time on it and it was very entertaining, but it wasn't profitable.

Why none of my bots made real money

So those are the bots that I built. I spent months on them, but I never made a significant profit, because it's competitive and it requires a level of focus that I didn't have. I did spend time working on it, but I never really went hard at it. Some people will spend 20 hours a day trying to make something work, and eventually they do.

And you need to be very smart at this. There are quants that apply their mathematical knowledge to these types of markets, and they are probably profitable because they know what works and what doesn't. For me, one of the biggest sources of inspiration was observing how quants trade options, especially binary options, where you have a given time frame for a trade and either you win everything or you lose it. It's a binary trading system, just like these markets.

What profitable Polymarket bots actually do

I know people that are successful with Polymarket bots, and they make thousands, if not hundreds of thousands a month. What they do is pay close attention to every single bet placed on Polymarket. And not only that, also the pending bets, the liquidity, the slippage, all the things that are temporary. They capture and store all of it, and they make sure that data is clean, fast and reliable with no interruptions, because that data is key to making decisions.

With that data you can observe the most profitable bots and see when they enter and what market conditions made them enter. That's probably one of the most successful ways to make money: if you can replicate the exact data at the time they entered a trade, you can make a similar trade, or reverse engineer their strategy and apply it yourself.

What I would do if I started again

If I were to do it again, I wouldn't try to create new things like the fair value bot or the trader analysis bot, or compete in crowded strategies like latency arbitrage. I would take a few profitable traders, ideally automated ones, and capture Polymarket data with as much precision as possible, all the up and down bets, so I can replicate the situations where they made a trade and reverse engineer their strategy. Then I can apply it myself, maybe to another market, or make it better by reducing the latency.

This is especially true for weather bots, because those are really good at knowing what the weather will be at any given time. You simply observe them and figure out the best way to buy a given position.

Conclusion: copy what works

You need to pay attention to what works out there. Do not try to reinvent the wheel, because many people have tried. Unless you have an edge, unless you are a quant with strategies that work for you, you do not want to come into Polymarket and build a new bot from scratch before knowing whether it will be successful. You can have your own hypothesis like I had, but you will likely end up losing a lot of the time. You don't know what you don't know, and the best way to go about it is to learn from those that are actually making money.

And they are going to be low key. They will try to hide their steps and move money between wallets so they never accumulate thousands of dollars in one wallet, because that would be too obvious. They know many people are watching them, so they hide their steps to avoid copy traders that may ruin their strategies.

In essence, copy what works. Reverse engineer other bots, especially the ones that are making money today, reliably. Once you see how it's done, you can add your own twist to make it profitable, either by changing the market or changing some conditions that let you be faster or win more.

Another way to do it is to look at traditional markets and apply option market strategies that have been around for a long time to Polymarket. But that's more advanced and takes more technical skill.

Either way, the goal is to get something going profitably first, and then you can experiment and see things for yourself. Your time is limited, and you have to try a bunch of things until something works.

If you want to learn more about my experiences, send me a message on Telegram. And if you want help building bots, we can set up a consulting session. It's $5,000 an hour. Have a nice day.