Momentum and Impulse Detection with Trailing Stops and Hedging

How It Works This strategy monitors real-time Polymarket price feeds for sudden, sharp moves in market probability — 'impulses' — that may signal incoming news or crowd information aggregation. When an impulse above a threshold is detected, the bot enters in the direction of the move, betting that momentum will continue as more participants react to the same underlying information.

Entry/Exit Conditions Entry is on impulse detection — a rate-of-change threshold in market probability over a short window. The trailing stop mechanism adjusts the exit price upward as the position profits, locking in gains while allowing further upside. Hedging logic adds positions in related or opposing markets to reduce net exposure once a profit target is partially reached. Settlement tracking ensures positions are closed before or at market resolution.

Verification No verified results are published. The repo has 1 star and was created in April 2025, running through 2026, suggesting a longer development history. Real-time operation is confirmed by the description but performance metrics are absent.

Implementation Notes Real-time data feed integration is essential — latency in detecting impulses directly erodes edge since the market partially adjusts before entry. Trailing stop implementation on a prediction market requires careful handling because prices are bounded [0,1] and can gap at resolution. The hedging module adds complexity and must be calibrated to avoid over-hedging that eliminates the original edge.

Risks Momentum strategies in prediction markets are vulnerable to false signals from thin liquidity causing price spikes that immediately reverse. Information events that drive impulses may already be fully priced by the time detection and execution occur. Prediction markets have hard resolution dates that create time decay pressure not present in traditional momentum markets. Trailing stops may trigger prematurely on illiquid markets.