How to Automate Polymarket Trading

What You Need

The Signal-to-Execution Flow

A well-structured Polymarket bot follows this loop:

1. 1.

   Poll Musashi /api/feed

   Every 25 seconds, fetch new signals filtered by urgency=high. Each signal contains matched market IDs for both Polymarket and Kalshi.

2. 2.

   Filter and score signals

   Keep signals where sentiment ≠ neutral, confidence > 0.70, and your position in that market is below your exposure limit.

3. 3.

   Check current market price

   Before entering, verify the Polymarket price is consistent with the signal direction. Reject if price has already moved past your entry threshold.

4. 4.

   Calculate position size

   Use Kelly criterion or fixed fractional sizing based on confidence and edge. The Musashi signal includes an edge estimate as a starting point.

5. 5.

   Place the order

   Submit a limit order via the Polymarket CLOB API. Set a time-in-force to avoid stale fills if price moves away.

Code: Polling Musashi and Placing a Polymarket Order

const MUSASHI = 'https://musashi-api.vercel.app'
const MIN_CONFIDENCE = 0.72
const MAX_POSITION_SIZE = 50 // USDC

async function runTradingLoop() {
  let lastSeen = Date.now()

  setInterval(async () => {
    // 1. Fetch signals
    const res = await fetch(
      `${MUSASHI}/api/feed?urgency=high&since=${lastSeen}`
    )
    const { signals } = await res.json()
    const newestSignalTs = signals.reduce(
      (max, signal) => Math.max(max, signal.createdAt),
      lastSeen
    )
    lastSeen = newestSignalTs

    // 2. Filter
    const actionable = signals.filter(s =>
      s.sentiment !== 'neutral' && s.confidence >= MIN_CONFIDENCE
    )

    // 3. Execute
    for (const signal of actionable) {
      const size = Math.min(signal.edge * 100, MAX_POSITION_SIZE)
      await placePolymarketOrder({
        marketId: signal.markets[0].polymarketId,
        side: signal.action === 'YES' ? 'buy' : 'sell',
        size,
      })
    }
  }, 25_000)
}

runTradingLoop()

Risk Management

Automated trading amplifies both gains and errors. Before deploying:

• →Paper trade for at least 2 weeks to calibrate signal accuracy before using real funds.
• →Set a per-market position limit (e.g., 5% of your total bankroll) to prevent over-concentration.
• →Add a daily drawdown circuit breaker — if you're down more than X% in 24 hours, the bot pauses.
• →Monitor Musashi's signal accuracy by tracking whether bullish signals corresponded to price moves.