How to Build a Trading Platform That Will Be In Demand
When it comes to the direction of trading, you can’t do without a software solution tailored to the needs of the business. More and more individual traders and trading organizations choose custom solutions to consider all industry requirements and get the most out of the product.
See the article for how to build the best trading platform and how much it would cost.
What is a Trading Platform?
Trading platform is a meaning software for ordering financial products. We are talking about stocks, bonds, exchange-traded commodities, and derivatives. Among the financial intermediaries are brokers, dealers, market makers, as well as stock exchanges.
The trader gets access to international financial markets. A broker is responsible for communication between the market and the trader. Another role is that of an investor, who provides capital in exchange for a share of profits. Moderators oversee compliance with the rules, and administrators run the platform.
The platform is used for such purposes:
- Obtaining information about quotations, i.e., about the value of the asset at the current moment (the quotations are provided by the broker, who receives data from partners – liquidity providers).
- Technical or graphical analysis, which allows evaluating the current state of the market and forecasting the situation for the nearest period.
- Deal management, including opening/closing of orders, partial closing of orders, creation of pending orders, and other basic operations.
- Account management, i.e., opening accounts and moving between accounts while performing market analysis and trading directly.
- Strategy testing, meaning testing the effectiveness of manual and algorithmic actions based on the quotes’ history.
- Analysis of trading performance based on trading history and creation of a statistical report with further export.
The specifics are determined by the area to which the product belongs. It can be a complex stock trading software, allowing you to perform various operations with securities. In a separate category is a specialized crypto trading platform.
Such solutions are simple and easy to use. It’s no wonder that they are becoming more popular every year.
Brief Analysis Of The Trading Software Market
The global market of online trading platforms is developing quite rapidly and steadily. According to The Business Research Company, in 2022, it was $10.27 billion. From 2022 to 2023, the figure rose to $10.96 billion (CAGR 6.7%). By 2027, it is expected to grow at a CAGR of 7% until it reaches the $14.36 billion mark.
Notably, COVID-19 had little impact on the success of the industry. Although one of the consequences of the pandemic, experts call for the increased adoption of digital solutions. Many other factors also seriously affect the situation.
Among the factors stimulating development:
- The rise in the use of mobile devices and the availability of the Internet on a global scale.
- The increasing popularity of AI, namely robo-advisors, which enable deep industry research and risk mitigation.
- Businesses (government and commercial banks) that are seeking to move to customized trading software.
- The proliferation of modern cloud solutions that expand trading opportunities.
- The need to constantly monitor the market to detect and prevent financial crimes.
The global cryptocurrency market is also expected to show impressive growth. According to Markets and Markets research, it was $1.6 billion in 2021. By 2026, the figure will rise to $2.2 billion (CAGR of 7.1%).
In the next few years, the trading industry will not slow down, meaning it will be profitable to work in this direction. Now you have many opportunities to create the best trading platform based on innovation.
Top Custom Trading Software Development Trends to Watch Out for in 2023
Robo-advisors are important for automating investments. The basic scheme: a user enters a target return and risk tolerance into the app, and the AI creates a customized portfolio and manages it.
Robo-advisors also make investment and savings recommendations based on short- and long-term goals. In addition to robo-advisors, we also recommend implementing ML and algorithmic forecasting.
This feature is useful for beginner investors and people who do not have enough time to immerse in the trading process.
Cloud solutions provide new opportunities for trading. Users can work from anywhere, allowing greater flexibility, freedom of action, and continuity of processes.
A 2021 Google Cloud study shows that 93% of exchanges and trading systems offer cloud data and services. Banks (commercial, investment) and buy-side companies are also actively moving to the cloud.
Increased Safety and Security
The trading app belongs to the FinTech category, which means it is vulnerable to cyber threats. Here’s a simple example. When users download an app or register with a broker, their data is stored on servers.
Even if the broker uses cloud providers, the risks remain. They are related to server/cloud misconfiguration and phishing. It is important to implement 2FA, encryption (HTTPS, SSL, and TLS), and comply with anti-money laundering laws.
Having a mobile version is advantageous. This is a valuable opportunity to access the financial market with a few clicks. It is useful for investors with different backgrounds. Here are a few well-known examples.
Forbes calls E*TRADE the best trading app for beginners in investing. Fidelity Spire is also suitable for inexperienced users. TD Ameritrade, on the other hand, is aimed at advanced traders. In the same study, Binance.US became the best crypto trading app. All of them are available on Apple iOS and Android.
Adaptation to Unique Needs
A software trading solution must be flexible and scalable. This allows traders to quickly adjust to changing industry requirements and achieve new goals.
From this point of view, the best trading software is considered a product with functionality that is easily customizable according to the current needs of the trading business.
Note that the specifics of your digital solution may depend on its type.
Types Of Trading Platforms
Before ordering development, decide exactly what your software should be.
Such a product is created for day traders and retail investors. It includes a wide list of custom features: trading operations, news, notifications, real-time analytics, and more.
These are specialized systems adapted to the specific requirements, trading style, and investment goals of the company. Certain rules are stipulated here, and trading activity is strictly regulated.
Considering the products in terms of specific functionality, we can distinguish these types:
- Tools for monitoring the stock market.
- Personalized investment management solutions.
- Transaction middleware.
- Brokerage workflow management software.
- Platform for securities trading.
- In-depth trading activity analysis solutions.
- Liquidity management tools.
- OTC trading platforms.
No matter which option you choose, you get a full set of smart features. With a digital platform, you can perform key trading tasks even faster and more efficiently.
Advantages Of Trading Software
With trading platform development, you will get a product with valuable features for your business.
- Convenience and simplicity. Thanks to easy-to-use functionality and special tools, such as robo-advisors, the execution of financial transactions is simplified.
- Time savings. Now there is no need to contact a broker directly to make a transaction. The online trading app makes all transactions available digitally with a couple of clicks, including from your smartphone.
- Comprehensive approach. Everyone involved in the trading process can perform all the necessary buying and selling activities at any time, which makes the work simple and flexible.
- Access to up-to-date information. Traders get information in one place. The crypto trading app provides charts that are updated in real-time.
- Real-time alerts. The user can set reminders for important events. For example, when it comes to trading highly volatile assets.
- Advanced analytics. The solution provides access to high-level methods and tools that help predict trends, events, and behavior.
- Smart decision-making. Based on reliable and timely data, businesses can build effective trading strategies and execute transactions promptly.
We described the best features of stock and cryptocurrency trading platforms. If you implement all of them, you will provide the most convenient user experience possible. Also, don’t forget to think about monetization in advance.
Trading App Monetization Models
We’ve selected five optimal income strategies for your platform to use.
This option assumes that some key features are free, while advanced features require payment. For the model to work, premium features have to be really useful. For example, the best option for crypto trading platforms is automated tools such as bots.
This model is similar to the previous one with the difference that the app is only available by subscription. The fee can be charged monthly or annually, regardless of whether the product is used or not.
It is a common practice in the brokerage industry: payment for order flow (PFOF). In brief, brokers do not send clients’ orders to the exchange but directly to the market makers. They get commissions for that.
According to Forbes, Robinhood, the best stock trading app in its category, earned $420 million from this model in the first quarter of 2021.
Fees and interests
Monetization can consist of charging interest on each transaction or transaction fee. For example, for eToro, these are CFDs, overnight fees, and withdrawal fees. There is also an inactivity fee, which applies to accounts that have been inactive for more than a year. The optimal option is a fixed interest rate.
To monetize online stock trading software, you can use relevant advertising. These can be banners, videos at the beginning of the video, or interactive video ads. However, you need to know the measure and not use too many promotional offers.
Also, to create the best stock or crypto trading software, you should pay attention to its functionality.
Key Features For Your Trading Platform
Only registered people should have access to trading processes. Everyone must create an account and verify their identity. Verification is done according to KYC rules. This approach, combined with 2FA, protects data securely.
Each user has a profile in the system. It stores personal information, the history of deals, and statistics with indicators of trading activity. Also, the platform should have flexible portfolio investment settings, tools, page layouts, etc.
This is all about the process of buying and selling securities and assets. Without them, there is no point in a digital solution. One of the key features is the placement of transactions. On a cryptocurrency trading platform, this can happen either manually or automatically (with the help of bots).
Search and filters
Among the must-have features is a sophisticated search system with advanced filters. This simplifies and speeds up work processes. Sorting by parameters lets you find what you need in just a few clicks.
The function is necessary to save the best variants on the online trading platform. They will be added to a separate folder. Thus, the trader can read them later or use them again.
Virtual advisors are based on AI algorithms. They provide useful investment advice based on current market data. The deeper the trader goes into the trading process, the higher the chances of making the right choice. Every best stock trading app has this feature, both for beginners and professional traders.
The platform contains visual data on key business processes and their efficiency. Analytics is available in real-time. The trader can adjust trading strategies according to current goals and expected results.
A newsfeed should have carefully selected information sources. Everything related to the financial market is published here. Being aware of important events, you will be able to make trading transactions even more profitable.
These can be various alerts, such as order status changes, exchange news, etc. This makes it easier to monitor the market situation and increases control over the volatility of assets.
We are discussing a separate page containing various educational resources (articles, videos, etc.). This is necessary so everyone using the platform can familiarize themselves with basic information about it.
Don’t forget about integration with third-party systems and services. This is necessary to expand product capabilities and improve the UX, especially when automating transactions.
It’s time to talk about the main thing: how to create the best trading software that will make your business successful.
Trading Platform Development: 7 Main Steps
The path to the goal consists of 7 stages, each with its own objectives.
Step 1. Choose product type
Mobile apps are the most convenient and easy to use. No wonder they are so popular. According to Statista, 204 billion apps were downloaded from the iOS App Store, Google Play, and third-party Android stores in 2019, and as many as 255 billion in 2022.
Choose mobile trading app development if you need fast access to business processes. Then you can use smartphones and tablets for trading, which means you won’t be tied to your work laptop.
Step 2. Market research and regulatory analysis
Study similar platforms, their strengths, weaknesses, features, and tools. Find your own custom features to help you create the best online stock trading app and make it as useful to yourself as possible.
Also, study the legal requirements in FinTech and, specifically, trading. For example, if you are focused on the US, be prepared to meet the requirements of the SEC, FINRA, SIPC, and the laws at the state level. In Europe, among other things, you must consider GDPR regulations.
Step 3. Create UI/UX design
This is an essential step; UI/UX designers do a significant job here. Your team needs an experienced Product Designer at this stage.
Their job is to create a user flow and a striking visual representation of your product. They should incorporate users’ demands and wishes into the product features.
Starting with a dynamic prototype makes sense if you want to test the usability. This model allows you to ensure the product’s convenience just for you.
Step 4. Trading app development (MVP)
The stage begins with selecting the tech stack, depending on the type of project, infrastructure, and unique characteristics. Work on the web platform includes:
- Backend development: languages .NET, Java, Python, Kotlin, Swift, powerful frameworks (RoR, Node.js, etc.), DBMS (MySQL, MongoDB).
DevOps specialists use tools like Docker and Jenkins. They strive to make the trading software development process agile to deliver the product to the customer faster.
Step 5. Integrations with third-party solutions
Special attention is paid to third-party integrations. These can be broker and stock trading platforms (Ameritrada, Alpaca Finance, E*TRADE, IB), communication solutions (Twilio), and payment processing services (Stripe).
It’s also useful to implement analytical tools: Amplitude Analytics, AppsFlyer, Firebase by Google Analytics, and Mixpanel.
Step 6. Ensure high security
To ensure the confidentiality of data, experts use the following methods:
- encryption based on HTTPS, SSL, and TLS;
- authentication (two-factor, password-based, biometric);
- access control, e.g., based on roles;
- hardware or software-based firewalls;
- monitoring (intrusion detection systems, network monitoring tools).
Step 7. Testing and maintenance
The final stage of trading system development is testing the finished software. The goal is to ensure there are no technical errors and to meet the initial requirements. After testing and deployment of the project, the work does not end. You should provide regular updates and bug fixes.
The Challenges of Trading App Development
The challenges you may encounter while working on the trading product:
The platform must integrate with many third-party services and systems, such as payment gateways, stock exchange platforms, accounting tools, etc.
A lot of integrations are challenging in terms of development and analysis.
To develop a trading app, it is necessary to have a deep understanding of the subject area. This task can only be accomplished by experienced professionals.
The development team must have industry experience and relevant skills in development and business analysis of such projects.
Staying up-to-date with market trends
Trading is a rapidly changing market. You need to monitor the trading market trends and top competitors and constantly refine your functionality. That way, your product will always be up to market trends.
Compliance with financial regulations
Each region has its own financial regulations. It is quite challenging to launch trading applications that are designed to be used in different countries. The application must be compliant with the legislation of each country.
Research the legal issues in each state. You must have an authorized brokerage business for everything to go smoothly.
Otherwise, you will need to get a license from the relevant regulatory body, become part of investor protection programs, and ensure that data security rules are followed.
Risks of fraud
An application to buy/sell securities passes through certain filters that check the client on various parameters. The system must cut off suspicious users and their transactions.
Implement multifactor authentication and AI-based fraud prevention techniques in your platform.
The Cost Of Trading Platform Development
Various factors are taken into account in determining the cost: from the scale of the project to the number and specifics of the functions.
We will be based on the hourly rate of an Eastern European mobile developer, in the range of $41-60 (we will take the minimum figure of $41).
Here is an example calculation for a trading mobile application for one platform with essential functions for investment (MVP).
|Features||Development time (hours)||Costs ($)|
|Authorization, session management||80||3,280|
|Onboarding, identification (KYC)||80||3,280|
|Withdrawals and deposits||120||4,920|
|Market data, trading operations||120||4,920|
|Backend integration layer||400||16,400|
|Administrative web application (for MVP projects, it can be skipped)||320||13,120|
|Business and system analysis, requirements, documentation||400||6,400|
Usually, customers require two native applications for the most popular platforms: Android and iOS. This increases expenses on development and testing.
Sometimes we use cross-platform frameworks to save ⅓ part of mobile platform development costs, but these frameworks have their own limitations.
Remember that a company providing trading platform development services should have flexible pricing and consider the project’s unique features. This is one of the advantages of the custom approach.
Benefits of Custom Trading Software Development
The individual approach is beneficial, and there are many reasons for that:
- Maximum product performance ensures stability and continuity of business processes.
- Personalization of functionality for unique business requirements makes the product maximally useful.
- Flexible pricing allows you to get the best results with minimal costs.
- Implementation of innovative technologies expands trading capabilities (AI, ML, advanced analytics, etc.).
- Mobile user experience opens easy and fast access to trading processes from smartphones and tablets.
Do you want to get decent quality for the best price? Then work with professionals who have an in-depth understanding of your industry.
How to Build a Trading Platform with RNDpoint
RNDpoint is a trading platform development company with impressive experience in FinTech. We have been working in the software development market since 2014, helping businesses to implement projects of any complexity.
We can develop a large-scale solution from scratch for specific trading tasks, such as stock trading and investment. Besides, we can create an automated product that will take your users’ experience to the next level.
We have more than 250 software development professionals in our team. We have all the knowledge and skills your project needs right now.
Building a FinTech solution is beneficial for your company. Create the best app for cryptocurrency or traditional trading with valuable features that fit your goals and requirements. This will be the starting point for increasing your financial capacity and scaling your trading business.
What is a trading platform?
It is a digital solution for placing orders for financial products: stocks, bonds, exchange-traded commodities, and derivatives. Its key roles are traders and investors, brokers and dealers. Moderators enforce rules, and administrators manage the platform.
What is the value of the online trading platform market?
In 2022, the global trading platform market value was $10.27 billion. As of January 2023, the figure rose to $10.96 billion.
What growth dynamics of the trading software market are predicted in the coming years?
By 2027, it will grow at a CAGR of 7% until it reaches the $14.36 billion mark.
Which is the key factors driving the trade platform market growth?
The development of the industry is stimulated by:
- the active use of mobile devices and the Internet;
- the popularity of AI, including robo-advisors;
- the transition of businesses to customized trading products;
- the spread of cloud solutions;
- the need for constant market monitoring.
What are the most popular trading apps?
Charles Schwab, Fidelity Spire, TD Ameritrade, E*TRADE, Robinhood, SoFi, Vanguard, Fidelity, Interactive Brokers, Binance.US, Betterment, and many others.
Explore your business and technical capabilities with RNDpoint