In this guide
Key takeaway: Prediction markets enable you to trade on the outcome of real-world events. Purchase YES or NO shares that are worth $1 upon a correct prediction. It is less complex than equity trading, and you can begin with just $1.
Welcome to the world of prediction markets. If you have ever thought "I reckon that will occur" — you already possess the mindset of a prediction market participant. The distinction is that in this environment, you can commit genuine capital to your belief and earn returns when your forecast proves accurate. This beginner's guide to prediction markets will have you executing trades within five minutes.
How prediction markets work (the 60-second version)
Prediction markets establish tradeable propositions regarding upcoming 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 valued at precisely $1 should the event materialise, or $0 if it does not occur. The prevailing price embodies the collective market assessment of likelihood. Should you believe the market's valuation is inaccurate, you can transact — and when your assessment proves sound, you realise gains.
Step 1: Choose a platform
The principal prediction market platforms include:
- Polymarket — leading in trading volume, blockchain-based (USDC on Polygon), available internationally (excluding US)
- Kalshi — CFTC-regulated, fiat-denominated, restricted to US participants
PolyGram connects you to Polymarket's trading depth via a more intuitive platform — email-based authentication, no blockchain wallet required, and optimised for mobile devices. We suggest commencing with us.
Step 2: Fund your account
Depositing funds through PolyGram is uncomplicated. You may transfer capital via debit or credit card, or alternatively through cryptocurrency. Begin modestly — £7-35 suffices for initial transactions. Additional funds can be contributed whenever desired.
Step 3: Find a market you understand
The most frequent beginner pitfall involves participating in markets outside your domain of knowledge. Select a subject matter you already monitor:
- Follow politics? Start with election markets
- Follow sports? Trade upcoming match outcomes
- Follow crypto? Bet on price milestones
- Follow tech? Predict product launches and regulatory decisions
Step 4: Place your first trade
Explore PolyGram's markets page and identify a proposition where the current valuation diverges from your assessment. Should the market indicate 40% likelihood and you believe the true probability is 60%, acquire YES shares. Your potential profit if correct: $1.00 - $0.40 = $0.60 per share (representing a 150% gain).
Step 5: Manage your position
Once you have acquired shares, you possess three distinct approaches:
- Hold until resolution: Remain in the position until the event concludes. Upon a successful forecast, shares automatically settle at $1
- Sell early: Should market conditions move favourably before the event resolves, you may exit the position profitably without awaiting final settlement
- Cut your losses: Should fresh evidence alter your conviction, exiting at a loss proves preferable to maintaining a deteriorating position
Risk management for beginners
- Refrain from committing more than 5% of your account balance to any single market
- Prioritise high-volume markets (substantial trading activity, narrow bid-ask gaps) — sidestep obscure propositions with minimal participant interest
- Document your successful and unsuccessful trades to identify patterns in your decision-making
- Keep in mind: even markets priced at 90% probability fail roughly 1 in 10 occasions
Prepared to execute your initial prediction market transaction? Start trading on PolyGram →