Polymarket Bot Tutorial · Chapter 30 of 32

Production-grade risk management code for Polymarket bots: position caps, daily loss limits, halt sentinels, fill-rate watchdogs, reconcile-on-restart, idempotent retries. Code patterns from real production trader.

By Harley Young, lead writer at Polymarkets.co.il. Last reviewed: May 2026.

What this chapter covers

This is chapter 30 of our 32-part series on building a Polymarket trading bot. We cover the topic in depth across the sections below. Body content for each section is being written and rolled out chapter-by-chapter; FAQ answers and references are already complete and reflect production experience from running our own trader.

  • Why risk code is most of a real trading bot
  • Position caps (per-market, per-strategy, total)
  • Daily loss kill switch
  • Halt sentinels (file-based emergency stop)
  • Fill-rate watchdog
  • Reconcile diary vs on-chain on restart
  • Code: production-grade halt-aware loop

Why risk code is most of a real trading bot

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Position caps (per-market, per-strategy, total)

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Daily loss kill switch

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Halt sentinels (file-based emergency stop)

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Fill-rate watchdog

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Reconcile diary vs on-chain on restart

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Code: production-grade halt-aware loop

This section is in active development. Want to be notified when it goes live? Contact us or watch the authors page.

Frequently asked questions

What is a halt sentinel?
A file (e.g., data/halt_autobuy) that the bot checks before every order. If the file exists, the bot refuses to place orders even if the strategy says to. Lets you stop the bot mid-incident with a single touch command. We added this exact pattern to our production trader after a wedged-fill incident in April 2026.
What position caps should I set?
Per-market: 1-5% of bankroll. Per-strategy: 10-20%. Total open exposure: 50-70% of bankroll (keep cash buffer). Cap a SINGLE order at 1-2% of bankroll regardless of strategy - one fat-fingered order should never be account-sized.
How do I implement a daily loss kill switch?
Track realized + unrealized PnL per UTC day. If daily PnL drops below -3 to -5% of bankroll, set the halt sentinel and notify yourself. The bot stops new orders; existing positions are managed manually. Reset at 00:00 UTC daily.
What should the bot do on restart after a crash?
Three steps: (1) Reconcile open orders via SDK against your local diary. (2) Check open positions on-chain against your local state. (3) If anything diverges, halt the bot and require manual review. Never auto-resume into an inconsistent state.
How do I prevent a single bug from emptying my account?
Layered limits: code-level position cap, code-level order-size cap, file-level halt sentinel, exchange-level (Polymarket) implicit minimum/maximum, monitoring alerts that page you on unusual order rate. No single layer is sufficient - they multiply.
Should the bot trade if my logging fails?
No. If the bot cannot write to its diary, it cannot reconcile on restart, which means a crash leads to inconsistent state. Hard-fail the bot if logging fails. Healthy production bots are paranoid about their own observability.