alt Hacker NewsI've been quite successful trading weather prediction markets.
The prediction markets were never about predicting outcomes. If that's the level you are playing on, you're playing at the lowest possible level, and probably won't win.
The markets are now about properly modelling other peoples' manipulation of prediction. That's how Wall Street works as well. Companies can beat earnings and their stocks crash immediately after. It makes zero sense if you just model companies. It makes full sense if you stochastically model how an ensemble of humans behave under incentives and human-written bots behave under human-written policies.
"Hairdryer sometimes get pointed at the weather sensor" and "Government sometimes fudges jobs/CPI data" are more or less the same thing. Build it into your model. That's the level you need to play on to profit in these markets. It's not that different from how a chess engine works.
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I am getting into trading on my own (my main job was in machine learning and I studied math in university). I've also come to a similar conclusion that you pretty much have to model these "manipulations" on top of the statistics/Brownian-motion-driven behavior of any security. I am currently working on a hybrid model for something on Polymarket but it's not yet sophisticated. Do you have any resources that you can point me to that expand on this very idea of adding human behavior to financial modeling?
> "Hairdryer sometimes get pointed at the weather sensor" and "Government sometimes fudges jobs/CPI data" are more or less the same thing. Build it into your model.
Is this comment satire? Bet on things being intentionally and secretly manipulated by people you will never meet? In what direction? This just sounds like a recipe for participating in the most financially dangerous questions.
I'm getting Foundation vibes from this comment. Asimov wrote that in 50s. Which is to say, this is by no means a new idea.
Says "prediction markets were never about predicting outcomes", writes long winded tripe stating that "prediction markets exactly about predicting outcomes". Thank you Tai Lopez.