Momentum Trading with Impulse Detection, Trailing Stops, and Hedging

How It Works The Yury617/polymarket-impulse-monitoring-trading-bot implements a multi-component momentum strategy. It monitors Polymarket market prices for sudden probability shifts ('impulses') that exceed a configurable magnitude threshold, interprets these as momentum signals, and enters positions in the direction of the impulse. A trailing stop dynamically adjusts the exit price as the position moves favorably, locking in profits while staying in winning trades.

Entry / Exit Conditions Entry is triggered by an impulse detection event — a rapid, large move in a market's implied probability within a short time window. The trailing stop defines the exit: as price moves in the bot's favor, the stop follows at a fixed or percentage-based distance. A hedging module manages residual risk near settlement, likely by taking a partial opposite position to reduce variance on the final outcome.

Verification The repo has 1 star and was created in April 2025, updated through June 2026, suggesting active development over more than a year. No quantified P&L is disclosed.

Implementation Notes Real-time market data streaming is required for impulse detection — polling-based approaches introduce too much latency. Settlement tracking integration suggests the bot is aware of resolution timing and adjusts hedging accordingly. The combination of trailing stops and hedging adds meaningful complexity to execution logic.

Risks Impulse signals can be noise (e.g., a single large order temporarily moving a thin market). Trailing stops may trigger prematurely in volatile markets. Hedging near settlement can be costly if the hedge side is also illiquid. The strategy's edge depends heavily on the quality of the impulse detection algorithm.