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Building a Polymarket Trading Bot for Copy Trading & Wallet Analytics

#architecture #blockchain #opensource #tutorial

Prediction markets like Polymarket are evolving into real-time data-driven trading ecosystems. Instead of manually placing bets, traders are increasingly relying on wallet analytics, behavioral tracking, and copy-trading systems to identify profitable strategies.

In this article, I’ll break down how I built a Polymarket trading bot that monitors wallets, evaluates performance, and helps identify high-quality traders worth copying.

📺 YouTube reference (implementation walkthrough):
https://www.youtube.com/watch?v=tWCj1KODU9o

📦 GitHub repository (full bot code):

GitHub logo DextersSlab / Polymarket-Arbitrage-Trading-Bot

Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket

Polymarket Arbitrage Trading Bot (BTC, ETH Momentum Arbitrage trading bot)

TypeScript bot for Polymarket CLOB V2 5-minute BTC and ETH Up/Down markets. It monitors Chainlink strike/spot vs order books, enters momentum-aligned positions late in each epoch, optionally completes the opposite leg for a boxed pair, and manages exits with configurable risk rules.

You can check this bot pnl with this account.

https://polymarket.com/@9g9g99

My_account_Pnl
BTC-ETH-Momentum-Arbitrage-Bot-9g9g99.mp4

Built with @polymarket/clob-client-v2 and Node.js 20+. See V2_MIGRATION.md for Polymarket exchange upgrade notes.

Features

  • Dual-market confirmation — BTC and ETH must align before entries (reduces false signals)
  • Chainlink Data Streams — strike at epoch open + live spot for spot_minus_strike
  • High-frequency monitor — REST CLOB /book polling (~150ms), merged btc/eth wave logs
  • Six strategy phases — buy1, buy2, buy3, buy4, risk1, risk2, risk3
  • Paper trading — simulated fills without live CLOB orders
  • Optional redeem — gasless redeem via Polymarket builder relayer after epoch end
  • Deposit wallet…
View on GitHub

1. The Core Idea: Copy Trading Through Wallet Intelligence

Instead of predicting markets directly, the system focuses on a more powerful idea:

“Find people who are already good at predicting — and follow them.”

This is done by analyzing wallets and answering questions like:

  • Who is consistently profitable?
  • Who has high win rate over time?
  • Who is just lucky on a few trades?
  • What markets (crypto, sports, weather) do they specialize in?

2. Real Example: Why Risk Management Matters

A key observation from wallet tracking:

Some traders lose large amounts of capital in just 2–3 trades.

Example Scenario

Wallet A:

  • 3 trades total
  • Loss: -$12,000
  • Win rate: 0%

Wallet B:

  • 240 trades
  • Profit: +$9,000
  • Win rate: 56%

Even though Wallet A had fewer trades, the risk exposure per trade was extremely high, showing poor risk management.

This is why the bot doesn’t just track profit—it tracks behavioral consistency.

3. System Architecture Overview

The bot is structured into 4 main components:

1. Data Ingestion Layer

  • Pulls wallet data via Polymarket API

  • Fetches:

    • Open positions
    • Closed positions
    • Trade history

2. Analytics Engine

Computes:

  • Win rate
  • PnL per wallet
  • Trade frequency
  • Average bet size
  • Performance by timeframe (24h / 7d / 30d / all-time)

3. Wallet Classification System

Wallets are grouped into:

  • 🟢 Small PnL wallets
  • 🟡 Medium PnL wallets
  • 🔵 High-value (“whale”) wallets

4. Copy Trading Filter

Filters wallets based on:

  • Minimum win rate (e.g. >50%)
  • Minimum trade count (avoid lucky wallets)
  • Stable performance over time

4. Example Wallet Analysis

Let’s look at how the bot evaluates a real wallet pattern.

Wallet Example: “High Frequency Trader”

  • Total trades: 2400
  • Win rate: 56%
  • Profit last 24h: +$9,000
  • Markets: crypto + prediction markets

Interpretation:

This is a high-frequency systematic trader.

Strengths:

  • Consistent execution
  • High sample size (reliable stats)

Weakness:

  • Requires monitoring of drawdowns

Wallet Example: “Lucky Short-Term Trader”

  • Total trades: 3
  • Wins: 1
  • Losses: 2
  • PnL: -$12,000

Interpretation:

This wallet is not statistically reliable.

Even if one trade was profitable, the risk exposure is too high.

5. Niche-Based Strategy Filtering

The bot categorizes wallets into trading niches:

Crypto Markets

  • High volatility
  • Fast position turnover
  • Requires strict risk control

Sports Prediction Markets

  • Slower cycles
  • More stable patterns
  • Easier to copy trade

Weather Markets

  • Lower frequency
  • More predictable structures
  • Good for long-term strategies

6. Win Rate Computation Logic

One of the core functions in the bot:

win_rate = total_wins / total_closed_positions
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Example:

Wallet:

  • Wins: 49
  • Losses: 1

Win rate:

49 / 50 = 98%
Enter fullscreen mode Exit fullscreen mode

This is flagged as a high-quality wallet, but the bot still checks:

  • Trade history depth
  • Market consistency
  • Position sizing behavior

7. Copy Trading Flow

The system follows this pipeline:

  1. Scan wallets from Polymarket data
  2. Compute performance metrics
  3. Rank wallets by:
  • Win rate
  • PnL stability
  • Trade volume
    1. Filter top candidates
    2. Track selected wallets in real time
    3. Replicate trades (optional layer)

8. Key Insight: Bet Size Matters More Than Profit

One improvement added in the system:

Instead of only tracking PnL, the bot also analyzes:

  • Position size per trade
  • Risk exposure per wallet
  • Capital allocation strategy

Why this matters:

A wallet making:

  • +$1,000 profit with $100 bets is very different from
  • +$1,000 profit with $10,000 bets

Risk-adjusted performance is what matters in copy trading.

9. Why This System Works

The strength of this approach is:

  • It removes emotional decision-making
  • It replaces guessing with statistical tracking
  • It focuses on real trader behavior, not hype

Instead of asking:

“What should I bet on?”

We ask:

“Who has already proven they can win consistently?”

10. Final Thoughts

This Polymarket trading bot demonstrates how data engineering + behavioral analytics can create a powerful copy-trading intelligence system.

The key takeaway:

Consistency beats prediction. Risk management beats luck.

Resources

📺 YouTube walkthrough:
https://www.youtube.com/watch?v=tWCj1KODU9o

📦 GitHub project:

GitHub logo DextersSlab / Polymarket-Arbitrage-Trading-Bot

Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket Trading Bot | Polymarket Arbitrage Bot | Polymarket

Polymarket Arbitrage Trading Bot (BTC, ETH Momentum Arbitrage trading bot)

TypeScript bot for Polymarket CLOB V2 5-minute BTC and ETH Up/Down markets. It monitors Chainlink strike/spot vs order books, enters momentum-aligned positions late in each epoch, optionally completes the opposite leg for a boxed pair, and manages exits with configurable risk rules.

You can check this bot pnl with this account.

https://polymarket.com/@9g9g99

My_account_Pnl

BTC-ETH-Momentum-Arbitrage-Bot-9g9g99.mp4

Built with @polymarket/clob-client-v2 and Node.js 20+. See V2_MIGRATION.md for Polymarket exchange upgrade notes.

Features

  • Dual-market confirmation — BTC and ETH must align before entries (reduces false signals)
  • Chainlink Data Streams — strike at epoch open + live spot for spot_minus_strike
  • High-frequency monitor — REST CLOB /book polling (~150ms), merged btc/eth wave logs
  • Six strategy phases — buy1, buy2, buy3, buy4, risk1, risk2, risk3
  • Paper trading — simulated fills without live CLOB orders
  • Optional redeem — gasless redeem via Polymarket builder relayer after epoch end
  • Deposit wallet…
View on GitHub

If you want, I can next:

  • Turn this into a viral LinkedIn post version
  • Add code snippets for Medium (clean production style)
  • Or make it sound like a startup whitepaper / pitch deck article

Top comments (1)

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hiren-kava profile image
Hiren Kava •

Great breakdown of why wallet intelligence should go beyond raw PnL and win rate. Adding position-size analysis, minimum sample thresholds, and performance consistency makes the copy-trading filter far more reliable than simply following the highest-profit wallet. The architecture is clear, practical, and easy to extend.