Polymarket Whale Exit Fade Trader

Detects when multiple whale wallets exit positions simultaneously, causing market overshooting. Fades the panic by buying the dip after whale dumps, exploiti...

Whale Exit Fade Trader

Strategy

This skill monitors the top Polymarket wallets (via the predicting.top leaderboard) for coordinated exit events -- when multiple whales sell the same market within a configurable time window. When whale exits are detected, the skill fades the resulting panic by buying the dip.

Why it works

Whale exits create a predictable cascade:

1. Whale sells -- large position unwind pushes price down.
2. Retail panic -- smaller traders see the drop and panic-sell, amplifying the move.
3. Overshoot -- the combined selling pushes the market below fair value.
4. Reversion -- once the panic subsides, the market recovers toward its fundamental value.

The edge comes from distinguishing between "whales exiting for portfolio reasons" (liquidity, rebalancing, profit-taking) versus "whales exiting on new information." In most cases, coordinated whale exits are portfolio-driven, not information-driven, making the overshoot a reliable fade opportunity.

Signal Logic

Exit Detection

1. Fetch top N wallets from the predicting.top leaderboard.
2. Pull recent activity for each wallet from the Polymarket data API.
3. Filter for SELL actions within the lookback window (default 24h).
4. Group sells by market title and outcome (YES/NO).
5. Flag markets where >= MIN_EXIT_WHALES distinct wallets sold >= MIN_EXIT_VOLUME USD.

Fade Direction

• If whales sold YES and the market price dropped below YES_THRESHOLD -> buy YES (fade the dump).
• If whales sold NO and the market price rose above NO_THRESHOLD -> buy NO (fade the pump).

Conviction Sizing

Base conviction comes from threshold distance (per CLAUDE.md standard):

• YES: (YES_THRESHOLD - p) / YES_THRESHOLD
• NO: (p - NO_THRESHOLD) / (1 - NO_THRESHOLD)

Enhanced by an exit intensity multiplier:

exit_mult = 1 + min(0.5, (exit_whale_count - 1) * 0.15 + min(0.2, exit_volume / 5000))
conviction = min(1.0, base_conviction * exit_mult)
size = max(MIN_TRADE, conviction * MAX_POSITION)

More whales exiting and higher exit volume increase the fade conviction, capped at 1.0.

Edge Thesis

Factor	Why it creates edge
Whale exit cascade	Large sells trigger retail panic, overshooting fair value
Information asymmetry	Most whale exits are portfolio-driven, not info-driven
Behavioral bias	Retail overreacts to visible whale selling
Mean reversion	Markets recover once panic selling exhausts itself
Multi-whale confirmation	Requiring 2+ whales selling filters noise from single-wallet rebalancing

Safety

Safeguard	Description
Paper mode default	All trades are simulated unless --live is passed
Spread gate	Skips markets with bid-ask spread > MAX_SPREAD
Days gate	Skips markets resolving within MIN_DAYS
Position limit	Maximum MAX_POSITIONS trades per run
Flip-flop check	SDK context check prevents rapid reversals
Slippage check	Skips markets with > 15% expected slippage
Min exit whales	Requires multiple whales exiting, not just one
Min exit volume	Filters out trivially small exits
Conviction sizing	Position size scales with edge, never flat

Tunables

Variable	Default	Description
SIMMER_MAX_POSITION	40	Max trade size (USD)
SIMMER_MIN_TRADE	5	Min trade size floor (USD)
SIMMER_MIN_VOLUME	5000	Min market volume (USD)
SIMMER_MAX_SPREAD	0.12	Max bid-ask spread
SIMMER_MIN_DAYS	5	Min days until resolution
SIMMER_MAX_POSITIONS	6	Max open positions per run
SIMMER_YES_THRESHOLD	0.38	Buy YES below this probability
SIMMER_NO_THRESHOLD	0.62	Buy NO above this probability
SIMMER_EXIT_LOOKBACK_HOURS	24	Window for exit detection (hours)
SIMMER_MIN_EXIT_WHALES	2	Min distinct whales selling for signal
SIMMER_MIN_EXIT_VOLUME	500	Min USD volume of whale exits
SIMMER_LEADERBOARD_LIMIT	20	Number of top wallets to scan

Remix Ideas

• Time decay: Weight recent exits higher than older ones within the window.
• SmartScore filter: Only track exits from whales above a SmartScore threshold.
• Volume ratio: Compare exit volume to market daily volume for relative sizing.
• Multi-timeframe: Run with 6h, 24h, and 48h lookbacks and only trade when all align.
• Exit velocity: Track how fast whales are exiting (sells per hour) for urgency signal.
• Cross-market: If whales exit multiple related markets, increase conviction on all.

Dependency

• simmer-sdk (pip install simmer-sdk)
• SIMMER_API_KEY environment variable
• Public APIs: predicting.top (leaderboard), data-api.polymarket.com (activity)