In this guide
Key takeaway: Prediction markets enable you to trade on the outcomes of real-world events. Purchase YES or NO shares that are worth $1 upon a correct prediction. This approach is far less complex than equity trading, and you can begin with just $1.
Greetings to the world of prediction markets. If you have ever thought "that is bound to occur" — you already possess the mindset of a prediction market participant. The reality is that here, you can commit genuine capital to your beliefs 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 centred on 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 is redeemable for precisely $1 should the event materialise, or $0 if it does not. The prevailing market price embodies the collective probability assessment. Should you believe the market has mispriced an outcome, you can transact — and when your judgment proves sound, you capture gains.
Step 1: Choose a platform
The dominant prediction market venues are:
- Polymarket — leading in trading volume, blockchain-based infrastructure (USDC on Polygon), accessible worldwide (US excluded)
- Kalshi — CFTC-authorised, dollar-denominated, restricted to US participants
PolyGram grants you entry to Polymarket's depth of liquidity through a streamlined user experience — straightforward email registration, no blockchain wallet required, and an optimised mobile interface. We suggest commencing with this option.
Step 2: Fund your account
Through PolyGram, account capitalisation is uncomplicated. Funding options include debit card payments or blockchain transfers. Begin modestly — $10-50 suffices for initial positions. Additional funds can be contributed whenever desired.
Step 3: Find a market you understand
A frequent pitfall among newcomers involves participating in markets outside their domain of knowledge. Concentrate on sectors you actively monitor:
- Interested in governance? Explore political outcome markets
- Interested in athletics? Participate in competitive event predictions
- Interested in blockchain? Forecast digital asset price targets
- Interested in innovation? Anticipate technology announcements and policy shifts
Step 4: Place your first trade
Navigate to PolyGram's markets page and identify a proposition where the current valuation diverges from your assessment. Should the market quote 40% and your analysis suggests 60%, acquire YES shares. Potential profit upon accuracy: $1.00 - $0.40 = $0.60 per share (equating to a 150% gain).
Step 5: Manage your position
Once you have acquired shares, three pathways present themselves:
- Hold until resolution: Remain invested through the event conclusion. Upon accuracy, shares automatically settle at $1
- Sell early: Should market movements favour your thesis prior to settlement, liquidate your holding to realise gains without awaiting final determination
- Cut your losses: When fresh developments alter your conviction, exit the position at a loss rather than persisting in anticipation of recovery
Risk management for beginners
- Refrain from allocating more than 5% of your account balance to any single market
- Prioritise well-traded markets (substantial activity, narrow bid-ask gaps) — sidestep obscure propositions with sparse participation
- Document your successes and shortcomings to identify your edge
- Keep in mind: even markets priced at 90% probability fail to materialise 1 in every 10 instances
Prepared to execute your inaugural prediction market transaction? Start trading on PolyGram →