Weather Edge
A quantitative trading system that finds mispriced daily high temperature brackets on Kalshi prediction markets by fusing 194 AI and physics-based weather model forecasts against real-time market prices.
Win Rate
100%
2 of 2 trades profitable
Total PnL
+$2.17
Realized across all closed positions
Avg Confidence
92
Only trades scoring 90+ are executed
Cities Covered
5
NYC, CHI, DEN, MIA, LAX
Ensemble Models
194
Members across 5 model families
Uptime
24/7
Cron-scheduled scans 5x daily
How It Works
Every day, Kalshi lists binary contracts on daily high temperatures for 5 US cities. The market is inefficient because most participants rely on a single NWS point forecast. Weather Edge exploits this by building a full probability distribution from 194 ensemble forecast members, applying physics-based corrections, and finding brackets where the true probability significantly exceeds the market price.
Ensemble Ingestion
Pull 194 forecast members from 5 model families via Open-Meteo API
KDE Probability Engine
Gaussian kernel density estimation smooths discrete members into a continuous PDF
Physics Corrections
Apply wind mixing, wet bulb depression, and rounding adjustments
Market Comparison
Compare model probability against Kalshi bid/ask to find mispriced brackets
Confidence Scoring
All 5 checks must pass (ensemble spread, model agreement, NWS alignment, observations)
Automated Execution
Limit orders placed at bid+1¢ for maker fee (0%). Position monitor handles exits.
Alpha Strategies
Midnight High
Post-frontal cold advection sets the daily high at midnight before cold air arrives. The system detects when overnight temps exceed afternoon forecasts.
Wind Mixing Penalty
Strong winds prevent super-adiabatic surface heating. Gusts above 15 mph mechanically cap temperatures 1-2°F below clear-sky forecasts.
Rounding Arbitrage
NWS rounds to the nearest whole degree. A physics model suggesting 34.4°F means the reported high lands in a different bracket than 34.5°F.
Wet Bulb Depression
Daytime precipitation probability above 40% caps the high below the dry-bulb forecast through evaporative cooling.
NWS vs Ensemble Divergence
When the NWS point forecast diverges more than 2°F from the 194-member ensemble mean, the ensemble captures newer data the forecaster may have missed.
Risk Management
Half-Kelly Sizing
Max 10% of balance per trade. Half-Kelly criterion balances growth with drawdown protection.
Automated Exits
Freeroll at 2x, efficiency exit at 90¢, trailing stop. Position monitor runs every 5 minutes.
7 Pre-Trade Guards
Kill switch, daily trade count, circuit breaker, intraday drawdown, correlated exposure, bot window, duplicate order guard.
Tech Stack
Trade Log
Real trades executed by the system. Every position is logged with full transparency — entry price, exit strategy, confidence score, and P&L.
This is a personal research project. Not financial advice. Prediction markets carry risk of total loss. Past performance does not guarantee future results. The system trades with a small account to validate the quantitative approach.