122 lines
3.2 KiB
Markdown
122 lines
3.2 KiB
Markdown
# 🌤 Weather Trading Bot — Polymarket
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Automated weather market trading bot for Polymarket. Finds mispriced temperature outcomes using Open-Meteo forecasts, filters trades with **Expected Value** analysis, and sizes positions with the **Kelly Criterion**.
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No SDK. No black box. ~400 lines of pure Python.
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---
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## How It Works
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Polymarket runs markets like *"Will the highest temperature in NYC be between 40–41°F on March 4?"* These markets are often mispriced — the forecast says 78% likely, but the market is trading at 8 cents.
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The bot:
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1. Fetches 4-day forecasts from [Open-Meteo](https://open-meteo.com) (free, no API key)
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2. Finds the matching temperature bucket on Polymarket
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3. Calculates **Expected Value** — skips the trade if EV is negative
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4. Calculates **Kelly Criterion** — sizes the position based on edge strength
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5. Runs a full **$1,000 simulation** against real market prices before you risk anything
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---
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## Kelly + EV Logic
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**Expected Value** — is this trade mathematically profitable?
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```
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EV = (our_probability × net_payout) − (1 − our_probability)
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```
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**Kelly Criterion** — how much of the balance to bet?
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```
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Kelly % = (p × b − q) / b
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```
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We use **fractional Kelly (25%)** and cap each position at **10% of balance**.
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---
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## Installation
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```bash
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git clone https://github.com/alteregoeth-ai/weatherbot
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cd weatherbot
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pip install requests
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```
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Add your settings to `config.json`:
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```json
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{
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"entry_threshold": 0.15,
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"exit_threshold": 0.45,
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"locations": "NYC,Chicago,Seattle,Atlanta,Dallas,Miami"
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}
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```
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---
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## Usage
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```bash
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# Paper mode — shows signals + Kelly/EV analysis, no trades
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python weather_bot_v2.py
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# Simulation mode — executes trades, updates virtual $1,000 balance
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python weather_bot_v2.py --live
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# Show open positions and PnL
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python weather_bot_v2.py --positions
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# Reset simulation back to $1,000
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python weather_bot_v2.py --reset
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```
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---
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## Dashboard
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Open `sim_dashboard.html` in any browser to see the simulation in real time:
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- Balance chart with floating +/- labels on each trade
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- Open positions with Kelly %, EV, and price progress bar
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- Full trade history with W/L tracking
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- No server needed — pure HTML/JS
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---
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## Configuration
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| Parameter | Default | Description |
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| `entry_threshold` | `0.15` | Buy below this price |
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| `exit_threshold` | `0.45` | Sell above this price |
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| `locations` | `NYC,...` | Cities to scan |
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| `max_trades_per_run` | `5` | Max trades per run |
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| `min_hours_to_resolution` | `2` | Skip if resolves too soon |
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---
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## Live Trading
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The bot runs in simulation mode by default. To execute real trades, add Polymarket CLOB integration:
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```bash
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pip install py-clob-client
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```
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Then replace the paper mode line in `weather_bot_v2.py` with your CLOB buy function. Full guide in the article linked below.
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---
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## APIs Used
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| API | Auth | Purpose |
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| [Open-Meteo](https://open-meteo.com) | None | Weather forecasts |
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| [Polymarket Gamma](https://gamma-api.polymarket.com) | None | Market data |
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| [Polymarket CLOB](https://clob.polymarket.com) | Wallet key | Live trading (optional) |
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---
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## Disclaimer
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This is not financial advice. Prediction markets carry real risk. Run the simulation thoroughly before committing real capital.
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