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To make informed decisions in prediction markets, traders often utilize expected value calculations. By determining the probabilities of various outcomes tied to their investments, traders can gauge potential profits or losses. For example, if a trader perceives a 90% chance of Betas winning, their expected profit can be calculated against their investment risk. This allows for a systematic approach toward maximizing returns and minimizing losses.
Successful traders distinguish themselves by gathering and interpreting data that may not be fully considered by the market, providing them with an edge in making profitable bets.