Author: Changan I Biteye Content Team

THE LAST WEATHER SYSTEM USED FIVE METHODS TO PREDICT THE HIGHEST TEMPERATURE, BUT THE MODEL DOES NOT ALWAYS GIVE THE ONLY SOLUTION: ECMMWF CALCULATES 14°C, WC CALCULATES 13°C, REVISES IN REAL TIME TO GIVE 13.5°C

Weather systems are perfected and projections are always a zone。

Moreover, there are risks beyond prediction in the weather market: Data sources may not be adequate, rules may change quietly and movements may reverse at the last hour。

The forecast must therefore be accompanied by a strategy of trading, shared after two weeks of actual combat, with both profitable and pedals。

I. In addition to projections, there are three pits

The previous weather system had solved the problem of forecasting, but it had only entered the market to find that the reason for losing money sometimes had nothing to do with forecasting。

The data sources are not matched, the rules change quietly, and the last hour of the journey reverses, and it becomes clear from these pits that the risks of the weather market are not just predictive: there are three layers:

DATA SOURCES ISSUE: WU DOES NOT MATCH METAR

THE WEATHER MARKET RULES ARE GENERALLY BASED ON DU DATA。

WU is the Weather Underground, a United States weather platform with data directly from observations reported at weather stations around the globe. For the weather market, WU reads data from local airport weather stations。

THE AIRPORT WEATHER STATION SENDS A STANDARDIZED METEOROLOGICAL TELEGRAM EVERY HALF HOUR, CALLED METAR, A GLOBAL CIVIL AVIATION FORMAT. IT CONTAINS INFORMATION ON TEMPERATURE, WIND SPEED, CLOUD MASS, VISIBILITY, ETC., AND IS AN IMPORTANT BASIS FOR AIR MOVEMENT. THEORETICALLY, THE TEMPERATURE OF THE AIRPORT AS SHOWN BY WU SHOULD HAVE COME FROM THIS METAR NEWSPAPER。

THIS IS TRUE FOR AIRPORTS IN OTHER CITIES, WHERE THE WU READINGS AND METAR BASICALLY MATCH AND ERRORS ARE NEGLIGIBLE. MANY TRADERS HAVE ALSO DEVELOPED A HABIT OF LOOKING DIRECTLY AT METAR AS A REAL-TIME PREVIEW OF THE SETTLEMENT TEMPERATURE。

BUT THE WU DATA AND METAR AT SHENZHEN BOAN AIRPORT OFTEN FAIL TO MATCH, OR EVEN SHOW A DIFFERENCE OF TWO DEGREES。

This deviation does not need to be considered in other cities, but in Shenzhen it can directly transform a transaction that was correct into a loss。

2. Frequent changes in rules

Maybe it's precisely because WW and METAR have been out of line for a long time, Polymarket switched data sources from Shenzhen on March 29th, and the settlement data source changed from WW to NOAA。

There's an update on the rule page on March 28th

NOAA uses data from weather.gov, which closely corresponds to METAR, which often deviates from WU readings。

There was an address of ilovebigbiscuit, which was placed at 27°C at an average price of 99.8% and a loss of $7,883. The probability is that the data from the WU show that the temperature won't reach 27°C, and it's stable, so the NOAA readings are different, and it's all gone。

THE SHENZHEN WEATHER MARKET HAS SINCE CHANGED TO WU. IN ONE MARKET, DATA SOURCES WERE CHANGED TWICE IN JUST A FEW DAYS。

So it's a habit: every time we go into a new weather market, the first thing is not to look at the temperature, it's to click on the lower left corner, to confirm which settlement data source is. This step could be taken in vain if we do more analysis later。

3. Continuous reverses

The Shanghai weather market has experienced the same trend over the last two weeks: the temperature of one slot begins in the morning, with a steady probability of pressing the other and closing, with a sudden reversal in the last hour, and the other, from close to 10% to 100%。

AS ON THIS DAY, 20°C HAS BEEN THE DOMINANT SLOT SINCE MORNING, RISING TO ALMOST 90% AT 2 P.M. AND LOOKS LIKE THE BIG PICTURE IS SET. AFTER 3 POINTS, 21 °C IS DIRECTLY REVERSED FROM CLOSE TO 0% TO 100%, WITH FINAL SETTLEMENT AT 21 °C. THE MAN AT 20°C WAS RIGHT BEFORE THE LAST HOUR, BUT THE SETTLEMENT WAS ALL WRONG。

The spring weather in Shanghai is already unstable, the temperature movement in the afternoon is heavily influenced by cloud levels and wind speed, and the judgement established in the morning may fail in its entirety in the afternoon。

II. Four combat methods observed in two weeks

It's too hard to guess a single temperature, so most players buy several adjacent slots at the same time, as long as the total cost of these slots does not exceed $1 combined. But it's also multi-temperature coverage, and when, how, and which market to buy, the result can be far from complete. The following are some of the trade strategies observed during the two weeks:

Strategy 1: Buy low-priced chips a few days early

Another approach is entirely different, using the uncertainties of the weather itself。

Polymarket’s weather market opens four days in advance. The sooner we open the market, the more the pricing of the various tranches spread, the more likely that many temperatures are not fully priced and are below 5 times。

There's a player specializing in this time difference. Today, 1 April, he went to the weather market No. 4 and cleaned up all the slots for less than 5 cents and bought them as cheap as possible. The logic is simple: the forecast is three days away, the weather can change at any time, the temperature that looks impossible today may become a hot spot in two days, and the chips of five can rise to 30, 50 or more。

At the heart of this strategy is the change in the weather. As long as there are enough slots covered, the total cost is within $1 and the final settlement of the slot is recovered at $1 and the rest is zero, without loss. However, if there is a significant increase in a certain slot in the middle, it can also be sold early on。

Strategy II: Capture undervalued temperatures with meteorological factors

Hot slots have often been fully priced, bought at high cost and reduced to very low rates. There is, however, a pool of traders on the market who specialize in the underestimation of cold-door temperatures。

Such traders observe real-time meteorological factors. For example, it's 1:00 p.m., and they'll look at the wind in the next hour or two: Southern winds usually bring warm and wet currents with potential for warming; if factors such as wind speed, cloud mass, and air pressure point in the same direction at the same time, they bet on temperature slots that the market has not yet responded to。

Losses are limited, even when miscalculated, because of cold slots, low prices and low entry costs. But if you're right, the increase in low-priced chips will be remarkable。

WU DATA ARE UPDATED EVERY HALF HOUR, AND IF THE LATEST DATA INDICATE THAT METEOROLOGICAL FACTORS HAVE NOT DEVELOPED AS EXPECTED, SUCH AS WIND SHIFTING AND A STAGNANT TEMPERATURE, THEY ARE SOLD TO STOP DAMAGE。

This strategy, which is more demanding for meteorological knowledge, requires a real understanding of the mechanisms by which wind direction, clouds and these factors affect temperature, is not something that can be judged by a glance at a forecast and is suitable for traders who have a professional background or who have worked in this market for some time。

Strategy III: Endboard policy

The Shanghai weather market has a pattern: temperature rises have largely stopped after 3 p.m., and the highest temperatures have usually appeared before that。

The tailboard strategy is to use this window. The UU data are updated every half hour, after the temperature has stopped, staring at the UU's data every half hour, and entering the field at the moment when the data have just been refreshed, at which point the Polymarket price has not been able to react, usually with only a few points of return。

There are two courses of action: buy the current temperature, yes, or buy the next higher temperature, No. The two operations are essentially the same, as the warming has stopped, leaving only two possibilities, and choosing which depends on which price is more economical。

The greatest risk of this strategy is change during the warming period. The time when the temperature rises and stops is not fixed, and clouds, wind speeds and air masses affect the rhythm of the day. If the temperature increase is over, but the temperature is pulled again, the tailings judgement will be completely invalidated。

Strategy IV: New market listing strategy

The new weather market in Polymarket is marked by the fact that there are no market vendors, and the spread is huge. There may be a gap between the price of one purchase and the price of one purchase, for example, 20 for one purchase and 60 for one purchase。

this spread is the opportunity。

the operation is to hang a single line below the hot-gate temperature slot and wait for the purchase order to be settled. because the spread is big enough, even if a few hot slots are attached, the total cost can be kept below $1。

However, such markets have one characteristic that must be noted: extremely low liquidity. Hundreds of dollars of deals can knock down the odds of the current hottest temperature, making it look like it's losing。

So there's only one principle to implement this strategy: hold it until it's settled, and don't operate too often. Short-term price fluctuations have no reference value in low-liquid markets。

Strategy V: one day in advance (reverse)

WU WILL RELEASE THE HIGHEST TEMPERATURE FORECAST FOR THE NEXT DAY ONE DAY IN ADVANCE. THE MOST INTUITIVE METHOD OF IMPLEMENTATION IS TO BUY ALL THREE SLOTS NEAR THE PREDICTED TEMPERATURE ONE DAY AHEAD OF THE FORECAST。

THAT'S HOW PLAYERS WORK. THE 15O C, 16O C AND 17O C SLOTS WERE PURCHASED ONE DAY IN ADVANCE OF MARCH 27, AND THE 19O C, 20O C AND 22O C SLOTS WERE PURCHASED ON MARCH 28, EACH WITH HUNDREDS OF KNIVES AT A TOTAL COST OF LESS THAN $1。

HOWEVER, WEATHER FORECASTS ARE NOT FIXED, AND WU PROJECTIONS ARE ADJUSTED IN REAL TIME AS WEATHER CHANGES. TODAY'S FORECAST IS 22°C, AND TOMORROW MORNING MAY HAVE CHANGED TO 19°C. ONE DAY EARLIER, THE FORECAST FOR LAST NIGHT HAD BEEN LOCKED, BUT THE TEMPERATURE HAD ALREADY GONE OFF BY THE TIME IT WAS SETTLED。

THE RESULT IS ZERO. SETTLEMENT NO. 27, 19 °C, AND SETTLEMENT NO. 28, 21 °C, RESULTED IN A DIFFERENCE OF TWO TO THREE DEGREES BETWEEN THE AREA COVERED AND THE ACTUAL SETTLEMENT。

The idea of multi-temperature coverage is right, but it is too early to enter the field and to build a warehouse before the forecast is stable, which is equivalent to the result of today's pledge with yesterday's information。

Strategy VI: Winning Trap to Buy No (reverse)

In the comment area, it was said that buying Yes was too difficult to guess, and that none of them would win, rather than buying No. But really

The weather market usually has 11 temperature slots, and the buy-in is one out of 11, and the buy-out is 10 out of 11. No has a natural advantage in winning, which sounds reasonable。

However, the hot slots are usually hung at more than 80 klicks, with only a few slots at such a price. If you buy all of the 80-and-over, there are four hot slots:

Cost: 4 x 80 = $3.20

The settlement rate falls on one of the four hot slots, which means 3 Nos win, 1 No lose:

• Win: 3 x 20 = 60

• Lost: 1 x 80 = 80

• Net result: 20% shortfall

It is true that the odds are high, but they completely offset the odds. Each win makes only a small profit, and one loss is worth a few. The price of No has already priced the odds, and there is no additional advantage in buying No。

III. PROJECTIONS AND STRATEGIES, ENOUGH

The predictive system is your eyes, and the trading strategy is your armor. Together, the two are the overwhelming part of the complete weather market。

The weather market is still in its early stages, with unstable rules, variable data sources and continuous reverses. But that is why information is poor and opportunities are still available。