Geopolitics Sentiment Reversal Trader

This is a template. The default signal is purely price-based with a staleness (days-to-resolution) multiplier -- no external API required. The skill discovers geopolitical markets at probability extremes, identifies likely overreactions using time-horizon analysis, and trades mean reversion. The skill handles all the plumbing (market discovery, geopolitics filtering, trade execution, safeguards). Your agent provides the alpha.

Strategy Overview

Geopolitical prediction markets are uniquely susceptible to overreaction. When breaking news hits -- a military strike, a sanctions announcement, a ceasefire collapse -- retail traders rush to reprice markets. The result is a predictable pattern: markets overshoot to probability extremes (>92% or <8%) and then revert 30-50% of the move within 24-48 hours.

This skill systematically identifies and trades these overreactions by combining two signals:

1. Probability extremes: Markets pushed beyond the reversal zones (>92% or <8%) where overreaction is statistically most likely.
2. Staleness factor: Markets with long time horizons (30-180 days) at extreme prices are far more likely to be overreactions than markets with 2-3 days to resolution where the extreme price may reflect genuine resolution information.

Edge Thesis: Behavioral Finance Overreaction Bias

The overreaction hypothesis (De Bondt & Thaler, 1985) documents that markets systematically overshoot in response to dramatic news and subsequently revert. In geopolitical prediction markets, this bias is amplified by three mechanisms: