Polymarket Candle Cross Asset Divergence Trader

Detects cross-asset divergence in Polymarket crypto 5-minute interval markets. When normally correlated assets like BTC and ETH show contradictory candle dir...

Security Scan

The skill's code, declared dependencies, and runtime instructions are coherent with a Polymarket trading strategy and only require the single trading credential it declares (SIMMER_API_KEY); nothing in the package appears to request unrelated secrets or system access.

Purpose & Capability

Name/description, SKILL.md, clawhub.json, and trader.py all describe the same cross-asset divergence trading strategy for Polymarket 5-minute interval markets. The single required credential (SIMMER_API_KEY) and the use of a simmer-sdk dependency are consistent with executing trades against Simmer/Polymarket.

Instruction Scope

Instructions and code focus on discovering interval markets, parsing intervals, detecting divergences, and sizing/executing trades. The SKILL.md and trader.py default to paper mode and only enable live trading with an explicit --live flag. There are no instructions to read unrelated files, harvest other environment variables, or exfiltrate data to unexpected endpoints.

Install Mechanism

No install script is embedded, but clawhub.json declares a pip dependency on 'simmer-sdk'. Requiring a third-party Python package is reasonable for a trading SDK, but pip installs carry moderate supply-chain risk — users should verify the package name/version and source (PyPI author, project page) before installing.

Credentials

Only SIMMER_API_KEY is required and documented; the code reads expected tunable environment variables (SIMMER_*), all of which are declared in clawhub.json. There are no unrelated credential or config path requirements.

Persistence & Privilege

The skill is not always-enabled (always: false) and autostart is false; it will not run automatically unless the user configures it. It does call apply_skill_config when available to load tunables, which is normal for a managed skill.

Assessment

This package appears internally consistent for running a Polymarket divergence strategy. Before installing or running live: 1) Keep the SIMMER_API_KEY secret and provision it with minimal funds/permissions for initial testing. 2) Run locally in paper mode (default) and validate behavior against known market snapshots. 3) Verify the simmer-sdk package provenance (PyPI project page, author, and release history) before installing to reduce supply-chain risk. 4) Confirm you will only run live trades with an explicit --live invocation and audit logs/positions after any live run. If you want higher assurance, request the full trader.py file (untruncated) and the simmer-sdk source/version to review any networking or unexpected behavior.

Candle -- Cross-Asset Divergence Trader

This is a template. The default signal detects cross-asset divergence between BTC and other crypto coins on 5-minute interval markets and trades the convergence using conviction-based sizing. The skill handles all the plumbing (interval parsing, divergence detection, trade execution, safeguards). Your agent provides the alpha.

Strategy Overview

Polymarket lists 5-minute interval markets for BTC, ETH, SOL, and XRP: "Will Bitcoin be Up or Down in the 10:50AM-10:55AM ET interval?" These resolve to YES (up) or NO (down) based on actual price movement. Crypto assets are highly correlated -- when BTC moves, ETH/SOL/XRP typically follow within minutes. But on Polymarket's discrete 5-minute intervals, this correlation occasionally breaks down: BTC shows UP (>55%) while ETH shows DOWN (<45%) in the same time window. This divergence is structurally temporary because the underlying correlation reasserts itself. The less liquid coin (ETH/SOL/XRP) tends to converge toward BTC's direction.

Edge

Unlike generic correlation trading that requires continuous price feeds and complex cointegration models, this skill operates on Polymarket's discrete binary outcomes where the divergence signal is unambiguous:

1. Structural correlation -- BTC, ETH, SOL, and XRP share macro drivers (risk appetite, USD strength, regulatory news) that create persistent positive correlation on 5-minute timeframes
2. Liquidity hierarchy -- BTC interval markets are more liquid and efficiently priced; when BTC and a follower coin disagree, BTC is more likely correct because it incorporates information faster
3. Discrete binary resolution -- each interval resolves to UP or DOWN, meaning a divergence between BTC=UP and ETH=DOWN must close by resolution time; one of them is wrong, and structural correlation says the follower is more likely wrong
4. Market segmentation -- Polymarket participants trading ETH intervals may not simultaneously monitor BTC intervals, creating temporary informational inefficiency across correlated assets

Signal Logic

1. Discover crypto interval markets via keyword search (Bitcoin Up or Down, Ethereum Up or Down, Solana Up or Down, XRP Up or Down) with a get_markets(limit=200) fallback
2. Parse each question to extract (coin, date, start_time_minutes) using regex
3. Group markets by (date, time_window) to find overlapping intervals across coins
4. For each window with BTC + at least one follower coin, compare candle directions:
   • UP: probability > 0.55
   • DOWN: probability < 0.45
   • NEUTRAL: 0.45-0.55 (ignored)
5. Detect divergence: BTC and follower show opposite directions with divergence >= DIV_THRESHOLD
6. Trade the follower coin toward BTC's direction (convergence trade):
   • BTC UP + follower DOWN -> buy YES on follower
   • BTC DOWN + follower UP -> sell NO on follower
7. Size by conviction (distance from threshold), not flat amount

Remix Signal Ideas

• Weighted correlation -- use historical 5-minute correlation coefficients between BTC and each follower to weight the divergence signal; higher historical correlation means stronger convergence expectation
• Volume-gated divergence -- only trade divergences where BTC's interval has high volume (confident signal) and the follower has low volume (inefficient pricing)
• Multi-coin divergence -- if BTC is UP but ALL followers are DOWN, the signal is weaker (BTC might be the outlier); if only one follower diverges while others agree with BTC, the signal is stronger
• Time decay -- divergences detected early in the 5-minute window have more time to converge; weight signals by remaining time to interval resolution
• Cascade detection -- if a BTC move triggers ETH convergence 5-10 minutes later in historical data, use the lag to front-run the convergence on the next interval

Safety & Execution Mode

The skill defaults to paper trading (venue="sim"). Real trades only with --live flag.

Scenario	Mode	Financial risk
python trader.py	Paper (sim)	None
Cron / automaton	Paper (sim)	None
python trader.py --live	Live (polymarket)	Real USDC

autostart: false and cron: null mean nothing runs automatically until configured in Simmer UI.

Required Credentials

Variable	Required	Notes
SIMMER_API_KEY	Yes	Trading authority. Treat as a high-value credential.

Tunables (Risk Parameters)

All declared as tunables in clawhub.json and adjustable from the Simmer UI.

Variable	Default	Purpose
SIMMER_MAX_POSITION	40	Max USDC per trade at full conviction
SIMMER_MIN_TRADE	5	Floor for any trade (min USDC regardless of conviction)
SIMMER_MIN_VOLUME	3000	Min market volume filter (USD)
SIMMER_MAX_SPREAD	0.10	Max bid-ask spread
SIMMER_MIN_DAYS	1	Min days until resolution
SIMMER_MAX_POSITIONS	10	Max concurrent open positions
SIMMER_YES_THRESHOLD	0.38	Buy YES only if market probability <= this
SIMMER_NO_THRESHOLD	0.62	Sell NO only if market probability >= this
SIMMER_DIV_THRESHOLD	0.08	Min divergence between BTC and follower coin

Edge Thesis

Crypto assets on Polymarket's 5-minute interval markets exhibit strong positive correlation driven by shared macro factors. When BTC and a follower coin (ETH, SOL, XRP) show contradictory candle directions in the same time window -- BTC UP while ETH DOWN, or vice versa -- this divergence is structurally temporary. BTC, being the most liquid and efficiently priced, is more likely correct. The follower coin's interval market is mispriced and tends to converge toward BTC's direction before resolution. The skill exploits this convergence with conviction-based sizing that scales with the distance from the trading threshold.

Dependency

simmer-sdk by Simmer Markets (SpartanLabsXyz)

• PyPI: https://pypi.org/project/simmer-sdk/
• GitHub: https://github.com/SpartanLabsXyz/simmer-sdk