In this guide
Key takeaway: Prediction markets enable you to trade on outcomes of actual events. You purchase YES or NO shares that yield $1 upon correct prediction. Trading here requires less complexity than equities, and you can begin with just $1.
Entering the world of prediction markets is straightforward. If you have ever declared "that is going to occur" — you already possess the mindset of someone trading in prediction markets. The distinction lies in the ability to commit genuine 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.
How prediction markets work (the 60-second version)
Prediction markets generate tradeable propositions regarding forthcoming occurrences. For instance:
- "Will the Fed cut interest rates in June?" — YES shares at $0.65, NO shares at $0.35
- "Will Bitcoin close above $90K on December 31?" — YES shares at $0.55, NO shares at $0.45
- "Will France win the 2026 World Cup?" — YES shares at $0.13, NO shares at $0.87
Each share returns $1 upon the outcome occurring, or $0 should it not materialise. The prevailing market price embodies the collective probability assessment. When you believe the market has mispriced an outcome, you transact — and profits follow when your assessment proves correct.
Step 1: Choose a platform
The leading prediction market platforms include:
- Polymarket — highest trading volume, blockchain-based (USDC on Polygon), accessible globally (outside US)
- Kalshi — CFTC-regulated, denominated in USD, restricted to US participants
PolyGram connects you to Polymarket's depth of liquidity through an intuitive interface — email-based authentication, no blockchain wallet required, and optimised for mobile devices. We suggest beginning your journey here.
Step 2: Fund your account
Funding your PolyGram account is uncomplicated. Deposits can be made through debit card or digital currency transfers. Keep initial amounts modest — $10-50 suffices for early transactions. Additional capital can be contributed whenever needed.
Step 3: Find a market you understand
A frequent pitfall for newcomers involves participating in markets outside their knowledge base. Gravitate towards subjects you actively monitor:
- Engaged with political news? Explore electoral prediction markets
- Passionate about athletics? Participate in competition outcome forecasting
- Interested in digital currencies? Speculate on cryptocurrency valuation thresholds
- Tracking technology developments? Forecast technological breakthroughs and policy outcomes
Step 4: Place your first trade
Navigate PolyGram's markets page and identify a proposition where the current valuation diverges from your assessment. Should the market price something at 40% whilst you evaluate it at 60%, acquire YES shares. Your potential gain if accurate: $1.00 - $0.40 = $0.60 per share (equating to a 150% gain).
Step 5: Manage your position
Upon acquiring shares, three pathways become available:
- Hold until resolution: Await the event conclusion. Upon correctness, shares automatically convert to $1
- Sell early: Should market movement favour your position prior to conclusion, liquidate for gains without awaiting finalisation
- Cut your losses: Should fresh developments alter your conviction, exit the position at a loss rather than pursuing recovery
Risk management for beginners
- Restrict individual market exposure to 5% of your account balance maximum
- Concentrate on well-traded markets (substantial activity, narrow bid-ask gaps) — sidestep obscure propositions with minimal participation
- Document outcomes and performance to identify your areas of expertise
- Consider that even markets priced at 90% probability fail approximately 1 in 10 occurrences
Prepared to execute your inaugural prediction market transaction? Start trading on PolyGram →