How to Build Own Trading Platform
The interest in online trading platforms is currently in the groove due to the growing number of traders and investors. As of 2021, 55% of US adults own stock, while 85% have investments beyond retirement accounts. For a trading industry, these figures mean that there is a decent space for growth. Therefore, it is critical to go with the latest trends to fight competition and attract new customers. Here is the complete guide on trading platform software development by the newest fintech industry standards and customer demands.
Online Trading Platform Types
Advanced technologies like AI and ML significantly expanded the capabilities of trading platforms. They made stock trading more attractive and accessible for investors. While many brokers lowered their commissions to zero, it became easier to enter the industry for new players. There are two major types of trading platforms popular today:
- Prop platforms: large brokerage companies develop trading software that matches their requirements and trading style to perform their direct trading operations.
- Commercial platforms: these platforms are targeted towards day traders and retail investors. These platforms feature various add-ons to help traders, such as news feeds, charts, reports, etc. They are easy to use and understand.
A prop platform is used by a single company that invests in stock trading and hires traders to manage its capital on the stock market. It is a custom platform specifically tailored to the needs of such a company. Commercial platforms are designed for individual traders and can be accessed by any comer to manage their trading activities. The platform type defines the necessary features, look-and-feel, and tech stack for future trading software development.
Core Features of Trading Systems
Trading is a highly dynamic, data-sensitive activity that requires comprehensive, fault-tolerant, and highly functional software for all operations. Therefore, the platform for online traders should utilize a range of critical qualities:
- Reliability: the system should successfully cope with intensive data loads without breakages;
- Interoperability: flawless communication with other systems, third-party APIs to update data in real-time without any conflicts between different services;
- Multiprocessing: stably high performance and timely processing of all requests to the server;
- Safety and security: protection from unauthorized access, scum, and fraud prevention.
These non-functional parameters are the vital criteria for custom trading software development. The core functional requirements for such a system include:
Authentication and Authorization
Sign up and sign-in are the first steps a user comes through. After that, a user should be given the choice of access options to choose the most convenient method upon their preferences (Google Authenticator, SMS, e-mail, etc.). At the same time, the authorization should provide secured access with zero risk for an account to be hacked.
A user profile contains all information about a user with the ability to edit it and change any available settings for security, payments, contact details, notifications, etc.
Trading implies constant monitoring of various statistical reports about the situation on the market, dynamic rates changes, trends, etc. All this information should be easily accessible through the dashboard for real-time analysis.
Search and Filtering Options
Traders should be able to find and filter specific orders, rates, currency pairs, indexes to extract only those deals and information they are interested in. The challenge here is combining multiple filtering options with real-time data update to display an accurate, up-to-date market overview.
While most platforms for traders feature similar functionalities, each one is unique in its look-and-feel, user interface, and technical capabilities. Onboarding options like user guides, pop-up prompts, a welcome tour, a help center help new users to get familiar with the system and learn how to use all the features correctly. Onboarding options should not be annoying, yet they need to be right in place when a user needs assistance.
The platform’s payment system should support various payment methods, including credit card, Bank transfer, PayPal, etc. In addition, secure and fast money deposit and withdrawal and quick transaction processing are a must.
Trading is a non-stop activity, and traders need to monitor the situation 24/7. Push notifications are required to inform platform users about all the updates and issues. Users need the ability to set up what kind of information they would like to receive in push notifications and disable them at all.
Quick and correct processing of customer requests, orders, deals, statuses, transactions, and many other operations on the admin side is the key to successful trading platform operation. Therefore, the admin panel should be convenient for administrators and provide all necessary information in a clear, structured view.
These are the minimum features you should consider when planning a new online trading system development. Of course, the exact scope of work depends on the project specificity and required integrations like Meta Trader 5 and other trading engines. Compliance with legal standards should also be taken into account. For the USA, these are the requirements of the Securities and Exchange Commission. For operation in Europe, a trading platform should correspond to the General Data Protection Regulation (GDPR) requirements.
Process of Trading Software Development
Trading software development is a holistic process that requires a high level of preparation, professionalism, and consistency. The development lifecycle for such projects consists of the following phases.
This phase usually includes comprehensive market research, competitor analysis, and customer research to identify what solution meets market expectations and can outpace competitors. Next, business analytics set clear commercial goals for the future product. At the same time, techops engineers define the suitable tech stack and development approach. The discovery phase ends up with a documented project scope, UI/UX wireframes and design, and a plan of deliverables.
During this stage, the developers work on coding the front-end and back-end of the future platform. The teamwork is coordinated by a project manager according to the plan, reporting the progress to a client.
QA engineers check the software for all possible issues like errors and bugs in the code and ensure that all implemented features work correctly in all possible user scenarios. They also check how the platform works on all supported devices and screen sizes. Performance testing is done to check the system stability within dynamic data loads.
When your trading platform is ready for public launch, it is finally released. However, it still requires maintenance and upgrades to cope with the growing market demands, technological changes, and competition. Constant improvement is the key to long-term commercial success.
How Much Does It Cost To Develop A Trading Platform?
The required features and technological complexity of the project define the development cost. Taking an average developer rate as $50 per hour, the approximate cost will be:
- Basic platform development cost: $50,000 to $70,000
- Average complexity platform development cost: $70,000 to $180,000
- Complex platform development cost: $300,000 +
To get an accurate estimation for your specific request, consult your trading software development company experts.
Online trading is a highly profitable financial industry that is currently on the rise and attractive for investment. Existing players do their best to stay competitive. At the same time, newcomers aim to develop advanced products to earn loyal customers and take a strong position on the market. So let’s bring technological advances to your trading business!