How to Build Own Trading Platform
They say that millennials are not afraid of anything: they were born in the early 1980s and late 1990s and went through several financial crises. For them, a savings account in the bank is the same as keeping money in a sock. Generation Y saw with their own eyes how political regimes collapsed, banks closed, money depreciated, and parents and grandparents lost all their savings. Therefore, young people prefer to invest in shares of large companies and start-ups - the risks are (relatively) less, and the income is greater. So developing mobile trading platforms is a good idea.
Even the global pandemic and the new crisis did not frighten micro-investors. Statistics show that Wealthsimple's investment platform users increased by 54% last year, with most of those registered under the age of 34. Trading app Robinhood reported a record number of deposits for the first quarter of 2021, and daily trading volume increased by 300% compared to the end of 2020.
Investing in stocks is fashionable and reliable, so the number of traders is growing every day. Existing applications do not cover all the needs of a large audience, so now is the perfect time to enter the market for new creative startups.
In this article, we reveal all the cards on how to develop a trading application and not screw it up. We tell you how to choose key features, how long the development will take, and what budget to expect.
A mobile trading application is a platform where users buy or sell stocks and monitor the dynamics of the exchange in real-time, and brokers (intermediaries) ensure the security of the purchase and sale and earn on transactions. There are two types of trading: traditional, when you buy shares of a company, and cryptocurrency trading, such as Bitcoin, Ripple, Litecoin, and others.Don't forget that finance is a serious subject, and in order to run a stock trading app, you need to obtain a license in all the countries where you plan to operate. We recommend that you consult with lawyers to find out more about the laws of the region where you will launch the platform.
Types of Trading Platforms
There are two types of trading platforms: prop platforms and commercial platforms. You can get it from the name that commercial platforms are mostly used by day traders and retail investors. They are quite user-friendly and include numerous helpful features, such as news feeds and charts, training for investors, and research.
Prop platforms, on the other hand, are customized platforms developed by large brokerages to suit their specific requirements and trading style.
Let's be honest, trading applications are a saturated field, and you need to thoroughly prepare before entering the market. Enemies of competitors need to be known in person, so we have prepared a short guide to popular companies.
E*Trade is considered the founding father of online trading. The company offers two applications - E*Trade for beginners and Power E*Trade for more advanced investors. The platforms work for Android and iOS, and allow users to easily manage their funds, receive real-time updates, generate reports, and check market news. The main advantages of E*Trade are the ability to choose risks (small, medium, and large) and the absence of commission for transactions on shares and EFTs (from the English exchanged-traded funds - an exchange-traded fund). Instead, they charge investors a contract fee, and the fee depends on how many trades you make per month.
Robinhood is a relatively new company that was founded in 2013, 30 years after the creation of the legendary E*Trade. Robinhood is engaged in trading stocks, options, ETFs, and also deals with cryptocurrencies. Their feature is the absence of commission for the transaction. How do they make money then, you ask? Look for the answer in the next chapter on monetization strategies.
The company keeps up with the times and actively develops new directions. For example, in 2019 they launched a separate app, Robinhood Snacks, with financial news and even their own podcast (!), which was downloaded over 10 million times in the first 9 months.
The Stash service is loved for its educational content, simple interface and detailed instructions for use, and therefore it is considered a good option for beginners. When registering, the application asks users questions about their goals and expectations from investments and then selects risks and a personal trading strategy. The company works with stocks and ETFs, and charges users a monthly fee of $1 to $9, depending on the amount of investment.
Core Features of Trading Systems
When we are asked: “How to develop a trading application?”, Clients usually mean the inside – how to choose the key features for the interface? Our advice is to organize a brainstorm with the team and think about how the user will move through your service: from the moment of registration to the withdrawal of dividends. Where he will click, scroll down or need more help.
People are greeted by clothes and applications by the registration form. If the user has difficulties at this stage, then he is unlikely to use the service further. Our main advice is to keep the page minimalistic and understandable. Nobody wants to spend more than 3 minutes filling in all the data fields.
Payments & Transactions
The most important part of the service is the ability to invest, that is, buy stocks or currencies. This feature includes charts with real-time updates of auction information, a company overview, growth figures, and other elements that help users make a purchasing decision.
To sell and buy stocks, the app also requires payment functionality. If you want to create an app as simple and popular as Robinhood, we recommend using certified payment gateways to protect transactions and user privacy.
The profile page should contain all the necessary information about the user - name, photo, region, and language settings of the application.
It is the process of adaptation in the interface. Simply put, you need to explain to the user how the application works. If you do this immediately after registration, then users will not have time to get angry or upset that they can find a certain section. Also, don't forget to add a "Skip" button for those who are not the first time.
These are smart reports that are generated in real-time. On this page, the user should see his balance, the shares he owns, and their value. Yes, there will be a lot of charts, numbers, and graphs, plus the data will be constantly updated. Therefore, we recommend discussing the structure of the interface with the UX designer in advance so that your clients do not get confused in the jungle of numbers.
The results motivate users to invest more, so it is important to add a page with personal statistics to the application. Some applications also generate automatic reports once a week or once a month, which is sent by a branded bot via messengers or in the application itself.
There is a must-have to manage everything quickly at one click: customer requests, orders enlisting and status indicators, personal accounts, access permission, managing transactions, pending and submitted orders, and more on the list. All of this allows making decisions in the shortest terms possible and ensures constant reach to necessary information.
In most other applications, notifications are more of an annoyance for users, but in trading platforms, this can help the user earn a staggering amount. Therefore, we advise you to implement push notifications when the stock price changes
Process of Trading Software Development
Trading software development will require you to devote lots of time and effort. There are crucial stages to consider if you don’t want to fail and lose your money. We kindly ask you not to ignore them and read this section carefully.
Legalities to Consider
If you make a trading app from scratch, and you’re dealing with a sensitive matter such as user’s data, social security numbers, credit card credentials, you need to take care of the legal part in the first place. If you’re operating in the US, you have to meet the standards of the Securities and Exchange Commission. In Europe, trading platform developers monitor if their implementations meet the legal standards of the General Data Protection Regulation (GDPR).
Other regulatory organizations and investor protection programs include:
- FINRA – Financial Industry Regulatory Authority
- SIPC – Securities Investor Protection Corporation
- NFA– National Futures Association
At this phase, we usually develop your MVP from scratch and fully take care of going live. You are supposed to get the whole product working without any troubles and can concentrate on finding investments and doing the first steps on the market.
MVP is launched. Now we shift into a part-time team to custom develop your project so can continue improving your online trading platform with any velocity you need implementing all changes and improvements required by the market.
Final rounds of testing and bug fixing by software engineers are followed by a release. Apps are uploaded to the stores and from that moment, you need to keep your app up-to-date to decrease bugs caused by updates in third-party APIs and update your app with new features.
At a certain point, you will have a “technical debt” and will require a lot of development to constantly scale, improve, and protect your trading system development software. We usually offer to create a dedicated team for you that is completely under your control.
Ardas Trading Expertise
In our practice, we had several cases of developing trading platforms. One of them is the complete system for an FX broker that handles all financial relations between a broker and its IBs organized in a multilevel hierarchy. Over 10 years on the market, presented in 12 countries, supporting over 15 languages, using more than 200 trade instruments of different kinds. It is a heavily loaded big data system that gives complete control and management over broker IBs and traders.
We were given the old system with many separate solutions with no integration and a lot of managing people supporting it. We transformed this system step by step, finding a balance between keeping it working, bugfix, and implementing new features, automation that we required to scale the business.
After successfully transforming this solution into an automated system we entered long-term support and evolution cycle and still update and tune this system according to customer requirements. We implemented IB portal administration area, SalesForce integration, 53 payment methods, and many other online trading platform features that you can read about on the case page. The team that worked on these projects became a dedicated permanent team of our customers and today is an integral part of the whole business.
Another case is about CFD trading instrument for FX brokers with full market control. A gamified high-load and high-speed instrument to trade currencies and commodities in a new manner. Extremely fast order processing. Being a SaaS tool gives full control of the trading market for each broker providing a fully organized real-time bidding process. A unique trading mechanism analyzes existing data and makes forecasts on the basis of the vector algorithm. Low latency application with the full set of reports and features to control the broker's financial health.
We were required to create an option and CFD trading platform with adaptation for smartphones, that provided a more engaging and gamified way to do short term tradings and earn the money. The platform had to be designed as a B2B SaaS giving brokers a trading tool to sell it to their traders. It has been successfully tested with a few FX brokers in the UK.
This SaaS tool had several principle pivots while looking for a working business model. We took part in planning, designing, and implementing each of them. We shifted from B2B to B2C and finally implemented both, trading tools and its UX was modified 3 times, we tried different payment strategies and finally changed the market from EU to China which caused many unexpected difficulties and obstacles.
We have been supporting this project since 2015. During this time the team changed a few times because the project was on hold while looking for more investments. Despite all the organizational difficulties, we supported it every time it was needed. After the new investor joined at the end of 2018, we adopted it to the Chinese market and launched it with several more features. We stayed with it during all the difficult post MVP phase.
How Much Does It Cost To Develop A Trading Platform?
If you've been thinking about how to develop a trading app and succeed, then here's the only winning strategy - to create a user-friendly service. When you work with user money, there is no room for ambiguity - everything should be clear and understandable. The simpler the interface, the more people trust you and return to the app more often to buy and sell shares. That's why we recommend boldly investing in UX/UI design and checking your contractor's portfolio beforehand. Start with a Google search or check out Dribbble and Behance to see the developer's portfolio and style.
We know that for dynamic markets like trading applications, development time is critical. If you decide to invest in UX / UI design and create a service with a beautiful and simple interface, then the rest of the development should be as fast as possible.
Good news! The average time to create a trading application at Ardas is 6 months. Also, you don't have to worry about the nativeness of the interface - React Native has a huge library of native UI elements, thanks to which elements in the application swipe and scroll just like in native development.
Judging by similar projects we've worked on, a service like Robinhood has a total cost of $85,000 or more for a full development cycle: prototype, UI/UX design, iOS, and Android versions, testing, and so on.
To create a successful investment service, use our step-by-step guide on how to develop a trading application. The first step is to define your niche. Who do you want to attract to the application and why? Where will you find your audience? Then, identify the key features that users will need, based on our list of must-haves and nice-to-haves. The fastest and easiest way to find out the details is to write to us directly and discuss the specific details of the future project. We will help with the design of the interface, which will be simple and understandable for future young investors.
How do you design a stock trading system?
The development process consists of 4 main stages, during which we implement from MVP to an advanced product with full functionality.
How does a trading platform work?
There are two types of trading platforms: prop platforms and commercial platforms. You can get it from the name that commercial platforms are mostly used by day traders and retail investors. They are quite user-friendly and include numerous helpful features, such as news feeds and charts, training for investors, and research. Prop platforms, on the other hand, are customized platforms developed by large brokerages to suit their specific requirements and trading style.
Are stock trading apps reliable?
Generation Y saw with their own eyes how political regimes collapsed, banks closed, money depreciated, and parents and grandparents lost all their savings. Therefore, young people prefer to invest in shares of large companies and start-ups - the risks are (relatively) less, and the income is greater.
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