Trading Application Development. How to Build a Trading Platform in 2023?

In recent years, investing has advanced rapidly as more investment platforms have embraced the digital era. Stock trading is no longer a niche activity limited to seasoned brokers and Wall Street experts. Recently, it has gained the same status as cryptocurrency trading in terms of accessibility.

Online trading platforms have become efficient tools for brokers and traders: users can buy and sell stocks, bonds, currencies, futures, and other assets using trading apps. Most types of trading platforms provide the entire trading experience, including a variety of trading tools, several bid kinds, charting, news feeds, and data analysis. Successful strategies for the market players, in turn, depend on the robust online trading platform.

What is a trading app?

An online system called a trading application makes it simpler to buy and sell financial securities, such as stocks, bonds, options, and cryptocurrencies, on trading platforms directly from the user’s device. Typically, trading apps also provide users with tools to monitor and update investment portfolios, research, analyze, and make strategic decisions. Automated trading systems are appropriate for long-term investments and short-term transactions, allowing users to maintain control at all times.

Investors can purchase and sell stocks directly from their smartphones using stock trading software for the financial industry. A stock trading application should be used for something other than day-to-day transactions. Still, it should enable users to monitor the status of their portfolios daily and keep an eye on market changes by giving them access to up-to-date data on share prices, market capitalization rankings, and sector performance.

Financial experts’ trading applications frequently share features with consumer finance apps, including banking, portfolio management, and cryptocurrency trading apps. For instance, some allow users to link their bank accounts directly, while others offer separate tools for risk monitoring and receiving personalized investment recommendations. 

Trading platform development

As the market requirements continue to rise, IT firms are now developing trading platforms for individual and enterprise-level usage, considering specific needs and business requirements. But before companies decide to invest in building a trading platform, they must understand the procedure and evaluate the project’s cost.

The complex process of creating excellent trading software may be quite challenging. These products must meet industry and security standards, offer a fantastic user experience, present a wide range of functions, and perform at a high level. However, a competent approach to custom software development can handle this task.

Whether you are a trader, an investor, or a fintech start-up looking to build your own trading platform, it’s essential to remember that we live in an age of constant innovation. Therefore, developing an excellent application that matches the market’s high expectations could take a lot of work.

This article will outline the development process of the stock trading platform and its associated costs. We’ll also highlight trading app benefits and ways to monetize it.

State of the market

The trading platform market is highly competitive and rapidly growing. According to Fortune Business Insights, the market value of automated trading software is projected to reach $12.16 billion by 2028. Another trusted research company, Allied Market Research, predicts growth to $18.4 billion by 2031 with a projected compound annual growth rate of around 7.8%. 

Financial organizations increasingly recognize the importance of investing in a bespoke trading application, given that the statistics indicate an upward trend in trading software development. With automated trading software’s projected growth and market value, developing a custom software solution can provide a distinct advantage in attracting and retaining customers. 

Another market trend that has appeared lately is leveraging advanced technologies. Artificial intelligence, machine learning, and some elements of blockchain allow trading platforms to offer a more seamless and personalized trading experience. As the market continues to grow and evolve, financial organizations seem to look for advanced, cutting-edge, and innovative trading applications that are likely to be better positioned for success.

Build a trading platform: must-have features

A successful trading platform must have several essential features to provide users with a seamless and efficient trading experience. Apart from some aspects, such as flexibility, user-friendly design, and data privacy, common for any type of software, trading applications should have a set of specific tools and attributes, including the following:

Access to real-time information

Any trading platform or application should provide users with access to timely and accurate information about the financial markets, e.g., price quotes, news articles, market trends, and everything that can impact their trades. When developing trading software, you may also need to create a real-time economic calendar, event tracking tools, alerts/notifications for price movements, and even integration with news and media outlets to provide the latest updates about the market.

Secure, intuitive, and reliable account management and payment systems

Secure solutions are vital not only for making the user feel safe but also for protecting users’ personal and financial information from unauthorized access. Trading software has always been a tempting target for hackers and other detractors. Finance software should implement robust security measures like two-factor authentication to prevent data breaches and cyber-attacks. Additionally, account management utilities should be intuitive, providing users with easy access to their account balances, transaction history, and other important information.

Intuitive interface, including order placement and management tools

Intuitive user interfaces play a critical role in any trading application’s success. Considering the market’s high competitiveness level, a seamless experience gained through a user-friendly interface that is easy to navigate is not a whim but rather a necessity. Although it should be easy, at the same time, it should provide users with a comprehensive set of tools such as order placement, trading history, and other essential features required for the full-fledged trading experience.

Integrations with third-party payment processors, tax reporting tools, and social media

Large-scale trading software also should have various integrations with third-party services. These integrations can enhance the convenience and functionality of your platform. By integrating with payment service providers and tax reporting tools, trading platforms can provide easy and secure payment options, simplifying user tax reporting and legal compliance. Social media integrations can help share insides and ideas with other traders, increasing the visibility of your platform at the same time.

Robust data analysis tools

Good analytical tools are crucial for traders to make informed investment decisions improving overall user experience. Trading platforms usually offer a range of data analysis tools, including backtesting, risk management, and portfolio optimization tools, to help them evaluate investment opportunities and manage their portfolios effectively.

Thorough compliance with regulatory requirements and industry standards

Every trading platform should operate legally and ethically. Platforms must comply with anti-money laundering regulations, KYC (Know Your Customer) requirements, and other industry standards to ensure that they operate transparently and securely. Also, you should implement robust compliance monitoring and reporting systems to detect and prevent any sort of fraudulent or illegal financial activity.

How do trading apps work?

Due to rapid technological advancements, your order can be filled in seconds when you buy or sell within an e-trading platform. Let’s examine the operation of a stock trading app.

• You place an order with your online broker after logging in.
• The order is then kept in a database after that.
• The database looks through every trade market and gets you the best price.
• Both sides are informed after the deal successfully matches the seller and buyer.
• The order and the price are visible to every investor.
• E-trading records the trade-in history if it becomes necessary to research previous transactions.
• The technology also transmits a contract to the broker who bought the shares and those who sold them.

How to monetize a trading app?

Once the question about how to develop a trading application is answered, your priority will be figuring out how to profit from it. Getting profit should be the primary goal while developing trading software, which should happen naturally due to providing customers with value. There are many ways to monetize your trading app, and you should consider one of the following strategies.

Transactions

According to Bloomberg, this monetization strategy is “paying for order flow.” Essentially, you get a little share of each transaction you forward to a market maker.

Interest and fees

Trading applications let users borrow money or securities at predetermined interest rates nowadays. Requiring a modest membership fee to access trading can be an excellent method to monetize your trading software. However, keep the sign-up procedure free and allow users to get stock market knowledge. To ensure you stay within a reasonable range, consider your competitors’ fees before setting commissions for any transaction.

Freemium concept

Paid subscriptions provide an additional method of funding a trading app. With this model, you can restrict access to some sophisticated features to paid subscribers only.

In-app advertising

One of the traditional methods of generating income from people using an app is in-app advertising. The app developers may charge to play or display advertisements from other service providers on their stock market investment app. Advertising, however, can become annoying to the user experience of trading apps, which can turn users away from your platform. So, use the following ad styles for trading apps wisely: Banner ads, Pre-roll video ads, Native ads, and Rewarded video ads.

Sell financial products

Various financial products, including mutual funds, gold ETFs, insurance, and other money security packages, can be sold to customers in order to increase revenue.

Trading applications market research

Always begin the creation of stock trading software with thorough research. Find out the platform you want to use as a starting point. If you wish to create professional trading software, concentrate on your product’s desktop version. Focus on mobile devices if you are going to develop a commercial application (Android and iOS). A cross-platform application (e.g., JavaScript-based solutions) might also be created to cut down on development costs.

Professional platform traders work in brokerage firms, which implies they spend more time on their computers. On the other hand, individual traders will probably trade on their phones and tablets. Therefore, you must determine your trading app’s target market to create a user-friendly platform for them. Create a marketing plan and monetization model after selecting the best platform model to ensure the trading app is profitable.

Top popular trading apps on the market

In recent years, the number of apps available on the trading market has exploded, making it challenging for traders to choose the right platform. Various platforms offer numerous features designed to make trading more accessible and easy to a broad audience, including the audience that has not previously claimed a considerable interest in trading. Let’s check the list of some of the most popular trading platforms and the key features that allow them to attract users.

Charles Schwab 

Charles Schwab is probably the most significant discount brokerage in the world when it comes to the assets under management rate. Nowadays, Charles Schwab unites several trading platforms with no minimums or fees under their rule. Above-average mobile applications with one of the widest choices of funds are the key to Charles Schwab’s popularity.

Fidelity Investment

Fidelity Investment is another popular trading platform that offers users a wide range of investment products. The strong customer support combined with commission-free stocks and ETFs is traditionally considered a strength of the trading platform.

eToro

eToro is a perfect tutorial on how to create an online trading platform friendly for users with all experience levels. The platform is primarily known as a social trading platform that allows users to connect with other traders, share strategies, and learn from one another. Apart from stocks and commodities, a platform also offers a range of cryptocurrencies and shares a relatively significant part of this market. eToro can be a decent choice for inexperienced traders, providing a highly intuitive interface and various educational tools.

TD Ameritrade

TD Ameritrade is another top-notched platform that is often considered an ideal first step in the world of trading. No balance minimums, outstanding educational content (webinars, tutorials, and convenient community forums), and low fees are things that distinguish TD Ameritrade from other competitors. 

J.P. Morgan Self-Directing Investing

The platform offers access to a wide range of investment products, including stocks, bonds, mutual funds, and ETFs (one of the best analysis and research tools for this particular point). J.P. Morgan’s trading platform is regularly placed on lists of the best. This status is perfectly complemented by solid multi-account access, robust analytical and research tools together, as well as advanced educational utilities.

get a custom solution for your project

contact our expert

Stages of trading application development

Due to its complexity, a deep knowledge of the trading process and market behavior is essential for creating an online trading and investment app. It also depends on the business model you pick to develop such cutting-edge apps. Working with a financial/trading development company that has the support of stock market app developers is highly encouraged.

Any web application’s development process begins with the discovery phase. Depending on the application’s complexity, this phase could last anywhere from a few hours to a few weeks. A product’s concept is evaluated, then transformed into a business plan and a roadmap for its development. Experts gather all the data and establish the app’s functionality, design philosophy, and user journey.

The phase of discovery was created to analyze all customer-side needs that are currently known properly and estimate the implementation-related scope of work.

Based on the analysis, you will create an RFP that contains all answers to the question about how to build a trading app. Usually, you determine the architecture approach, technology stack, task breakdown and estimation, team structure, and an approximate project budget and timeline at this stage of the development. 

Development process

After you hire trading app developers, the actual implementation can start. The phase we are discussing now is the development phase. How much does it cost to build a trading platform, then? Check out the example below.

Assume we will create a web application enabling anyone to sell and buy securities, such as stocks, gold, and currencies.

Trading web applications should therefore enable: user accounts creation, perform financial operations like topping up account balances to trade or withdraw money using a range of integrations (Skrill, bank account, etc.), and engage in trading. These operations enable functionality like transaction history and user activity. It is the most challenging aspect of a web application since, in addition to Buy/Sell buttons, it must also enable WebSocket streaming, allow for setting various trade indicators, and be highly secure to prevent fraud and data theft.

The creation of stock trading software involves numerous essential processes. For the most significant outcome, ELITEX offers a wide range of high-quality fintech development services as a trustworthy trading app development partner.

Our dedicated development team divides the project into backend creation (including data structure) and frontend development since we need excellent tools for WebSockets and chart display. In general, the final component is the infrastructure that needs to handle heavy loads brought on by numerous client requests; as a result, it needs to incorporate some streaming services.

Technology stack estimates

Note: We provide just a basic example of the tech stack for the trading platforms. It can be easily changed considering your project’s specific requirements.

• Cloud Provider: GCP
• Backend: GCP Postgres (SQL), Cloud Run, NodeJS, WebSocket server library, and GCP Redis
• Frontend: GoJS for graphics, WebSocket client library, and React.js

User interface design. Visual analytics is a critical component of trading apps. The line and bar charts, candlesticks, and other graphs are all considered by our UI designers. They use graphic and material design elements to translate those ground-breaking concepts into a visual representation. 

For usability studies or as proof of concept, the UI/UX designer may be able to produce a dynamic prototype. The logic of how the components of the stock trading app interact is also being created at this stage of development.

Development stage

At this stage, the code is written by the programmers. This is a fundamental element of developing bespoke trading software. Your developers should evaluate the designs at this point and translate them into code. Engineers can utilize programming languages like JavaScript for front-end development. Technologies like Python, .Net, and Ruby can weave their magic on the back end.

Always choose tech stacks and programming languages for fintech based on the skill level of your developers and the resources at your hands. Highly qualified engineers can also assist you in selecting the best third-party APIs to incorporate into the platform to boost security and performance.

How long does it take to create a trading application?

It typically takes around 850 hours to create a basic stock trading application in the finance industry. However, it is possible to develop stock trading software for the financial industry in as little as 400 hours or as much as 2,400 hours. The exact timetable largely depends on how complex your application is. The app development will take longer if you need an intricate individual design, numerous additional features, complex analysis tools, and advanced functionality.

App backend development

Developing data structures (SQL entities and relations between them)	3 days
Backend REST API to handle user requests such as account creation, money withdrawals, and balance topping up, and interfaces with various payment systems – at least two at the moment	1.5 months
A WebSocket server that streams data back and forth from/to a merchant exchange service and manages user trading transactions from a web chart	2.5 months
Frontend: REST API for basic CRUD operations	2 weeks
Open/close trading positions and load specified securities data for various timeframes: these are operations with a WebSocket server	2 months
Trading chart development (indicators, candle displays)	2 months
Two weeks are needed for each payment system integration. Since we will have at least two payment methods, the answer is four weeks	4 weeks
Infrastructure: Development of the deployment procedure over two weeksConfiguration of Redis, Postgres, Cloud Run, and Pub/Sub	3 weeks
System troubleshooting and stabilization	3 weeks

Please note that the estimation above accounts for implementation and excludes testing and bug fixing. In a desirable scenario, testing and application stabilization should contribute at least 30% to the development time. Another important note is that we focus on developing a relatively small trading application with basic functionality.

Regarding team structure for any kind of trading software development, the following would be ideal to have:

• One full-time back-end developer
• One full-time front-end specialist
• One part-time QA engineer
• One project manager (it can be a part-time option)
• One part-time DevOps engineer

In terms of timing, an application would require 6+ months to build, including one month for testing and stabilization, considering the development team structure will be similar to that mentioned above.

Application testing

QA experts perform comprehensive testing on various platforms and gadgets to establish the correct performances. In a good scenario, you should also guarantee technical support, troubleshooting, and regular upgrades after releasing the software to marketplaces.

Employ QA specialists to perform end-to-end testing for each product before the release to prevent legal action and customer anger. Make sure that the software infrastructure is free of bugs and impervious to DDoS attacks.

Deployment and maintenance

Once your app is functional, it is time to step up your marketing efforts. Make marketing awareness campaigns to tell your target market about the product’s advantages. Pay close attention to and clearly express the distinctive value proposition of your platform in the marketing pitch.

After creating buzz, you can launch your trading platform on the cloud. You will still need to process customer comments and carry out updates once the product goes live to keep the system functioning.

Cost of developing a trading app

So how much does it cost to design a stock trading app? We now look at the overall timing for a complete development cycle, including a finished prototype, UI/UX design, versions for Android and iOS, and testing. A team of 6 people will put in roughly 30 hours of work on average to create a trading platform with a limited yet self-sufficient functionality.

The project’s budget is based on hourly rates. The total cost, however, can range from $25,000 to over $100,000. Obviously, a trading platform for the financial industry with fewer functions will cost less than an app with all the intended capabilities.

Factors influencing stock trading app cost

Several aspects must be taken into account to estimate the price of developing a trading app. So, we have gathered the main elements that influence how much it costs to design an app listed below.

• The concept behind the app
• App’s core features and capabilities
• App’s level of complexity: basic, intermediate, or advanced
• The operating system you choose
• Technology and APIs utilized in the creation of apps
• App testing and quality assurance for UI/UX design

The back-end and front-end development

The cost of building a trading app will mostly depend on the application’s front and back ends. Your choice of technologies and frameworks will play a pivotal role in overall costs. There are two methods to pick from when discussing the backend architecture of a stock trading app: monolithic and microservice. Although Monolith is significantly more cost-effective, a Microservice architecture has the potential to make your application highly scalable and long-lasting.

As an in-depth trading procedure and understanding of market behavior are involved, developing an online stock trading and investment app entails several complications. Additionally, the price of developing such cutting-edge software depends on the app development partner you select.

Challenges and legal concerns

The constraints presented by the law will be less challenging to overcome if your firm is permitted and you wish to enter the market. However, if your business is brand-new, you must consider the legal implications first.

• Obtain a license from the regulatory organization in the nation or region where the trading platform is located.
• Join regulatory organizations like SIPC, FINRA, and investor protection programs to boost credibility.
• Protect users and their funds via multi-factor authentication, enhanced encryption, AI-powered fraud prevention, and other security technologies. 
• Comply with the PSD2 Directive, GFPR, or other regulations to protect consumers’ sensitive data.

Trading application benefits

Below are a few reasons why trading on online platforms is so beneficial.

Availability. A wide variety of financial solutions are available through online trading. You can discover what your target audience needs, whether a professional or individual trader.

It attracts a lot of investors. The number of investors using stock trading apps is rising quickly in the modern world. Since these apps are quick, secure, and offer simple transactions as well as real-time updates, investors prefer using stock trading apps to invest in the market. Users can rapidly check their targeted shares whenever they want, from any location, and make significant gains.

Great control. Users can access the exchange, monitor all operations, and take immediate control from their e-trading dashboard.

Suitability. The market for Internet trade is expanding quickly and offers opportunities for firms to make money. These days, you may create an e-trading solution with a sleek user interface and a handful of features to assist you in creating wealth from scratch.

Margins of profit. Enterprise owners can save costs by using e-trading platforms. Running a business doesn’t need renting office space or bringing more staff. You should create e-trading software and then advertise it.

Reduced transaction costs. The e-trading platform’s users conduct transactions from their accounts. Therefore, hiring additional staff to handle orders is no longer necessary.

User-centric approach. By learning about users’ objectives, philosophies, and risk tolerance, e-trading platforms may offer highly customized services to them, increasing user engagement.

24/7 operations. You can execute transactions or carry out other functions whenever and wherever you want because access to your e-trading site is available around the clock, every day of the week.

Hire app developers highly experienced in the fintech industry

As the financial sector environment evolves, customer knowledge and awareness of the quality of the goods and services rise, enabling businesses to better serve their clients by offering more savvy guidance and fintech solutions.

Although creating trading software is challenging and complex, it may also be highly profitable. You need a trustworthy trading app development partner who will take into account all of your goals and niche demands if you want the development of high-quality software to be truly effective.

Building a productive trading application requires careful consideration of every detail and a systematic approach throughout the development cycle. As a custom software development company, we design trading applications under the highest standards and use robust and modern technologies. Our IT experts also understand the stock market’s specifics well, thanks to our experience in the fintech industry; check our Watstock case study, a platform that forecasts changes in the stock markets, where ELITEX software engineers built a front end. 

Do you have a concept for an online trading platform and want to hire app developers? Our engineers are skilled in many areas, including backend development, artificial intelligence, automation, UX/UI design, and mobile application development. We guarantee both the affordability of our services and the high-quality end product. Contact us now, and your trading app creation will start swiftly.

Final thoughts

Trading software development has been a booming market in recent years, and it shows no signs of slowing down. As the financial industry becomes increasingly digitized, trading platforms become more and more popular. It impacts the applications’ core features, making them more accessible to a broad audience. Apart from traditional tools and utilities such as real-time market data, decent security systems, and integration of third-party payment services, nowadays, you also need to create many features tailored to improve the overall user experience. You should also pay attention to intuitive user interfaces, research and analysis tools, and comprehensive amateur content, as well as think about adding some advanced analytics tools (e.g., solutions based on artificial intelligence and machine learning) and adding opportunities for social trading.  

There are no direct answers when it comes to questions about how to create trading platform or its potential costs. Finding the right solutions in some cases may be a relatively easy task that can be completed in 5-6 months with modest budgets (around $30,000). However, sometimes it can be a really complex and costly endeavor project, depending on the platform’s scope and features. However, with growing demand and the potential for significant returns on investment, it can be a worthwhile venture. While there are challenges related to building a trading application, the potential rewards make it a compelling opportunity to take on this exciting and rapidly evolving market.

FAQ about trading application development

Our services

JavaScript Development

React.js Developers

Custom Software Development

Dedicated Development Teams

Let’s talk about your project

Drop us a line! We would love to hear from you.

• Richard Zaslavsky Client Partner
• Book a Call