How to Build a Trading Platform in 9 Steps

The online trading industry is set to jump to over $13 billion by 2026. If you’ve been looking to build a trading platform, now is the best time to capitalise on this burgeoning market. After all, this opens up opportunities for substantial revenue growth. 

To help you benefit from this opportunity, we’re here to guide you every step of the way. As experts in FinTech software development, we’ll tell you everything you should know about trading platform creation, including essential and advanced features, development stages, and other considerations.

Is It Worth It to Develop a Trading Platform?

The short answer is yes. But to make it more convincing, let’s discuss several reasons for this/ 

High-Profit Margins

One of the primary reasons to create trading platforms is the potential for high profit margins. Unlike traditional businesses dealing with inventory and operational costs, such companies mainly generate revenue through commissions and other user-based charges. For example, stock trading apps earned $22.8 billion in 2021, underscoring the profit potential within this sector.

Recurring Revenue

A trading platform is your way to get a steady recurring revenue stream. Change monthly or annual subscription fees, offer premium features, or take a small percentage of trades to create a reliable income source. Such a predictable revenue flow will grow your business consistently.

Growing User Base

The number of people engaging in online trading has grown remarkably. In 2021 alone, over 137 million individuals used stock trading apps — an impressive 49% increase from the previous year. This means your trading platform has a large pool of potential customers.

Global Reach

With a trading platform, your business isn’t bound to a single market. For example, the US stock market alone represents 53.2% of the global total. There are plenty of opportunities in other countries in Europe or Asia. Take your trading platform global to enhance your user base and, of course, increase your revenue.

Types of Trading Platforms You Can Create

Before learning how to build a trading platform, consider the options available and their unique features. Here’s a quick overview of such solutions:

• Stock trading platforms. Designed for buying and selling stocks and shares. When discovering how to build a stock trading platform, consider featuring charting, real-time data, order execution, and investment research.
• Cryptocurrency trading platforms. Enable trading of digital currencies like Bitcoin and Ethereum. To build a crypto trading platform, implement strong security measures, integrate with various cryptocurrencies, and ensure convenient wallet management.
• Forex trading platforms. Provide a solution for currency pairs trading. To build a forex trading platform, you need access to real-time exchange rates and leverage options.
• Commodities trading platforms. These solutions specialise in trading physical goods like gold, oil, and agricultural products. They often include futures contracts and real-time commodity price updates.
• Derivatives trading platforms. Consider complex financial instruments like options and futures. People use them to speculate on the future price of assets without directly owning them. These platforms must offer robust features like real-time market data, advanced charting tools, and risk management features.
• Binary options trading platforms. Offer simplified trading where investors bet on whether an asset’s price will increase or decrease within a specific timeframe. Such platforms should provide clear and concise information about the underlying assets and intuitive trading interfaces. 
• Social trading platforms. Combine trading with social networking, letting users follow experienced traders and imitate their actions. They should foster a community-driven approach to investing. 
• Algorithmic trading platforms. Enable automated trading based on pre-set criteria for price, volatility, volume, and other indicators.
• NFT trading platforms. They are for buying and selling non-fungible tokens (NFTs). Such platforms provide a marketplace for digital art and collectables with unique ownership characteristics.

Trading Platforms Comparison

Let’s take a closer look at each trading platform we discussed above. The following table compares the options by underlying assets, key features, and other essential parameters:

6 Essential Trading Platform Features 

While the specific trading platform features vary significantly depending on the asset type and target audience, several core functionalities are essential for most platforms. They include the following:

Order Execution

It is the core function of any trading platform. With its help, users place and manage different order types. Here’s what it offers:

• Various order types. Support market, limit, take-profit, stop-loss orders, and more complex options like stop-limit orders
• Order routing. Determines how and where an order is executed to get the best price
• Order status. Provides real-time updates on execution, like pending, filled, cancelled. 
• Order management. Allows users to change or cancel orders before execution

Market Data

Having access to market data is vital for informed trading decisions. The essential components include:

• Real-time quotes. Display the latest market prices for various assets
• Historical data. Provides past price information and trends for analysis

Portfolio Management 

Thanks to portfolio management, users track their holdings, monitor performance, and evaluate risk exposure. Key features include:

• Holdings overview. Shows current assets, quantities, and prices
• Performance tracking. Displays performance metrics like returns, volatility, and profit or loss statements
• Risk assessment. Analyses the portfolio’s risk level and provides tips for diversification

Account Management

With account management, users deposit, withdraw, and manage their funds. It typically covers the following:

• Account opening. Provides easy onboarding with Know Your Customer (KYC) verification
• Deposit and withdrawal. Supports various payment methods for adding and withdrawing funds
• Account balance. Displays real-time balance information
• Account settings. Allow users to customise account preferences, including language, time zone, and so on
• Transaction history. Records all account transactions for review

Security

Security measures are a must-have component of a trading platform due to the sensitive data and assets involved. Ways to ensure robust protection include: 

• Two-factor authentication (2FA). Adds an extra layer of security by requiring a second form of verification beyond a password
• Encryption. Protects data transmission and storage from unauthorised access
• Fraud prevention. Monitors and prevents suspicious activities
• Data privacy. Ensures compliance with data protection regulations like GDPR, CCPA, and more
• Secure login. Features password strength requirements and account lockout mechanisms

Mobile Trading

Mobile trading is necessary to access and manage trading accounts from anywhere using smartphones or tablets. It may require the following:

• Mobile app development. Provides a dedicated application for trading on mobile devices
• Responsive design. Ensures the platform works properly on different screen sizes
• Push notifications. Sends real-time alerts for order status, account updates, and beyond
• Mobile-friendly tools. Adapts order execution, portfolio and account management, and data displays for mobile use

Advanced Features to Add to Your Trading Platform

You can also consider adding advanced features to develop a trading platform that truly stands out and attracts more users. 

Charting Tools

They provide traders with in-depth insights into market trends and price movements, offering the following:

• Multiple chart types. Combine line, bar, candlestick, and Heikin-Ashi charts.
• Technical indicators. Include tools like moving averages, relative strength index (RSI), Bollinger Bands, Fibonacci retracement levels, and moving average convergence/divergence (MACD).
• Drawing tools. Ensure users can add trend lines, support and resistance levels, and various annotations.
• Timeframes. Support different time intervals (minutes, hours, days) for granular analysis.
• Customisable layouts. Let users adjust the chart’s look with different colours and chart types.

News and Analysis

Besides the market data, your trading platform may provide access to market news, analyst reports, and economic calendars. To enable that, integrate with reputable financial news sources and include expert analyses and forecasts. It will help users with decision-making. 

Screening Tools

Traders use screening tools to filter assets based on specific criteria and identify potential opportunities. Some of the possible features include:

• Customisable filters. Users can create filters based on price, volume, market capitalisation, and other aspects.
• Stock screeners. These specialise in filtering stocks based on market cap, price, volume, volatility, dividend yield, and more
• Forex screeners. Users find currency pairs based on volatility and correlation.
• Pre-built screens. Pre-configured screens offer common trading strategies.
• Notifications. Users get notifications when assets meet their specified criteria.

Risk Management Tools

On top of the risk assessment feature, you may offer users a way to manage those risks. Here’s what it takes:

• Stop-loss orders. Automatically close positions when the price reaches a certain level to limit potential losses.
• Take-profit orders. Close positions when the price hits a predefined mark to secure profits.
• Margin calculators. Calculate margin requirements before entering trades in different markets.

AI Algorithms

AI, one of the top FinTech trends, can improve your platform’s capabilities with intelligent market predictions and personalised experiences. How to build an artificial intelligence trading platform? Include the following:

• Predictive analytics. Use machine learning (ML) models to forecast market trends and price movements based on historical data.
• Personalised recommendations. Offer tailored trading suggestions relying on user preferences and risk profiles.
• Automated trading. Execute trades automatically following the predefined rules.
• Anomaly detection. Identify suspicious patterns and potential issues in trading activities.

Decentralisation with Blockchain

Blockchain technology removes intermediaries like banks and other financial institutions from the trade process to achieve decentralisation. In particular, it supports peer-to-peer trading — i.e., direct transactions between users and smart contracts that automate and enforce trade agreements, ensuring trustless transactions.

Cloud-Based Infrastructure

A cloud-based architecture can handle the increasing demands of trading platforms owing to the following benefits:

• Scalability. Manages varying user traffic and data volume
• Data backup and recovery. Offers backup and disaster recovery solutions
• Performance. Ensures fast data processing with minimal latency
• Global access. Provides access to the platform from anywhere with an Internet connection

Want to discover even more potential features for your trading platform? Check out our latest post on finance software development.

Technology Stack You Need to Develop a Trading Platform

Learning how to create an online trading platform involves another consideration beyond must-haves and advanced features — the technology stack. From frontend development to backend systems, you need various technologies and specialists.

You’ll require the following experts and skill sets:

If you’re looking for any of the above specialists, GoodCore is here to assist you. We offer bespoke software development based on the following cooperation models:

• Development from scratch. Build a trading platform from the ground up.
• Dedicated teams. Get a team of experts focused exclusively on your project.
• Team extension. Augment your existing development team with specialised expertise.

Choose a cooperation model that suits you best and develop a trading platform with us!

How to Build a Trading Platform Step-by-Step

Creating any software product requires a well-thought-out approach, and that’s especially true for financial solutions. Here are several critical steps on how to build your own trading platform:

Step #1: Define Your Requirements

Every successful project starts with a clear understanding of its purpose. For a trading platform, that involves identifying your target audience, the asset type you’ll focus on, and your platform’s unique value proposition. Here are some details:

• Target audience. Determine the kind of trader you want to attract. Are you targeting beginner investors, experienced traders, or institutional clients? Study your audience to decide on the features and design elements your platform should offer.
• Platform type. Popular options include stock, cryptocurrency, forex trading, and others discussed above.
• Value proposition. Decide what will set your platform apart from competitors. It may consist of advanced tools, low fees, or unique assets traded.

Step #2: Determine Core Functionalities 

Once you have a clear vision for your platform, it’s time to define its core functionalities. To simplify development and launch, consider building a minimum viable product (MVP) with essential features:

• Core features. Identify the basic functionality required for your platform to work correctly. These include account creation, order execution, market data, and portfolio management.
• Platform-specific features. Depending on your chosen platform type, additional functionalities may be necessary. For example, if you want to build a cryptocurrency trading platform, consider e-wallets, staking, and DeFi integration. In turn, if you create Forex platforms, include economic calendars, margin trading tools, and advanced charting options.

Step #3: Design Prototypes

The prototype design is crucial in visualising and testing your trading platform before development begins. The process includes creating clickable interfaces that simulate the user experience and testing them with potential users. Based on the feedback gathered, improve your platform’s usability, visual hierarchy, and other aspects.

Step #4: Create UI/UX Design

A proper UI/UX design of your trading platform is a must. It has to ensure your product is visually attractive and clear to traders of all levels. Cover the following aspects as part of the design process:

• Easy navigation. Organise platform content and features to ensure users will find what they need quickly and effortlessly. Use clear navigation paths and intuitive menu structures.
• Clarity. Provide clear, readable layouts with a clean design. Use consistent colour schemes, fonts, and icons to avoid any confusion.
• Responsiveness. Ensure your platform is fully responsive, meaning it works appropriately on various devices, including desktops, tablets, and smartphones.

Step #5: Develop the Core Functionality

At this stage, start implementing some of the fundamental trading platform features. These must include:

• User authentication and authorisation. Implement login mechanisms like username/password or email verification and access controls to protect user accounts.
• Trading engine. This will allow your platform to handle order processing, trade execution, and real-time market data.
• Trading tools. Like placing, modifying, and order cancelling options. 
• Payment and withdrawal processing. This enables your system to handle financial transactions.

Step #6: Ensure Security

Protect user funds and data with strong security measures. Implement, in particular, those discussed previously: 2FA, encryption, fraud prevention, and secure login. Configure firewalls, integrate intrusion detection systems, and comply with relevant industry regulations to make your platform even more resistant to security breaches.

Step #7: Integrate Third-Party Services

Third-party services integration significantly enhances your platform’s functionality. However, consider only the solutions relevant to your specific case. The possible options include:

• Payment gateways. Integrate reliable payment gateways for deposits and withdrawals. Prioritise gateways that support various payment methods (credit or debit cards, bank transfers, e-wallets, etc.) 
• Market data providers. Connect with market data providers to supply real-time or historical data for trading. It usually includes price feeds, market news, and economic indicators.
• Charting libraries. Incorporate charting libraries to offer advanced analytics capabilities to traders.
• Security systems. Integrate fraud prevention services, identity verification tools, and other security solutions.

Step #8: Conduct Thorough Testing

Before launching your trading platform, it’s necessary to handle QA testing. That’s how you ensure your platform is reliable, performant, secure, and bug-free. Types of testing you can conduct are as follows:

• Functional testing. Verify that all platform features work as intended.
• Performance testing. Evaluate the platform’s performance under various conditions, including traffic spikes or large data volumes.
• Security testing. Conduct penetration testing and vulnerability assessments to find and fix potential security threats.
• User acceptance testing (UAT). Test your platform with real users to gather feedback on usability, functionality, and overall experience.

Step #9: Deploy the Platform

Once you’ve tested your platform and fixed all the bugs, you’re ready to deploy it to a live environment. We recommend choosing a scalable and reliable solution, such as cloud services (AWS, Azure, or Google Cloud).

It’s always best to deploy your platform in stages. Start with a beta launch to a limited user base to collect feedback and identify issues before a full-scale deployment. Then, gradually proceed with a full-scale launch.

Want to hear the best part? GoodCore can expertly handle all the above steps of trading platform development. Just reach out to our team for a detailed consultation.

Legal Requirements for Creating a Trading Platform

Discovering the steps on how to build a trading platform is just a part of the process. There are other critical aspects to consider, including legal requirements.

This industry is heavily regulated due to the sensitive nature of financial transactions. Before conceiving any software development, obtaining licences and complying with applicable laws is often necessary. Here are the most critical legal requirements:

Licences Needed for a Trading Platform 

Depending on the country and the type of trading services offered, you may need to obtain different licences. These are some of the most essential ones:

• Broker-dealer licence: Authorises a firm or an individual to act as an intermediary between buyers and sellers of securities (stocks, bonds, or mutual funds)
• Investment advisor licence: Needed for firms or individuals providing investment advice or managing investment portfolios for clients
• Commodity trading advisor (CTA) licence: Necessary for companies or individuals offering advice on trading commodities or futures contracts
• Payment service provider (PSP) licence: Permits the platform to process payments and manage customer funds, ensuring compliance with financial regulations

Data Legalities

When it comes to data protection, different countries and regions have specific regulations. These are the most common ones:

• General Data Protection Regulation (GDPR). Your platform should comply with GDPR if it operates in the European Union or handles data of EU residents.
• Securities and Exchange Commission (SEC). The SEC regulates securities markets in the United States and requires compliance with market conduct and investor protection rules.
• Financial Industry Regulatory Authority (FINRA). This US-based, self-regulatory organisation oversees brokerage firms, their registered representatives, and exchange markets.
• Securities Investor Protection Corporation (SIPC). SIPC, another US-based organisation, protects customer securities in case of broker-dealer failures.
• National Futures Association (NFA). The NFA regulates trading practices for platforms dealing with futures and commodities trading in the US.

GoodCore’s Tips for Developing a Successful Trading Platform

If you’re still contemplating how to build a trading platform or any other platform type, check out our expert tips. These are universal for all kinds of trading platforms and will make a difference in the development process:

• Ensure lightning-fast data feeds and processing capabilities. Traders rely heavily on real-time data for informed decisions. Thus, optimise your platform’s processing power and invest in reliable infrastructure. It should handle high-frequency trading and provide accurate and timely market information.
• Optimise your platform for minimal latency. Low latency is crucial for trading platforms, as even milliseconds impact outcomes. Implement efficient data handling, reduce delays in order execution, and use high-performance servers to improve the overall trading experience.
• Leverage user data for personalisation. Study trading patterns and behaviour to offer customised dashboards, recommendations, and other personalised features.
• Enable social trading features. Create a social trading environment where users learn from experienced traders and benefit from their strategies. Some possible functionalities include leaderboards, copy trading, and trading signals.
• Incorporate game-like features. Implement gamification elements into your platform to increase user engagement and retention. Features like achievements and challenges will make trading more interactive and enjoyable.

Seeking deeper insights into finance software development or software development in general? Explore our blog for industry trends, best practices, how-tos, and expert advice.

How We Can Help You Create Your Own Trading Platform

Building a trading platform can be complex and demanding. Luckily, you won’t have to deal with it alone. At GoodCore, we fully leverage the advantages of custom-written software and deliver solutions tailored to our clients’ needs. Here’s how we make that possible:

• Tech and finance skills combined. Our team deeply understands financial software development requirements and has the tools and skills to bring them to life.
• Compliance ensured. We focus on regulatory compliance to ensure your platform adheres to all relevant laws and regulations, including GDPR, CCPA, PSD2, PIA, and so on.
• Secure payment gateway integrations. Our team selects the appropriate payment gateways that meet your requirements and smoothly integrate them with your platform.
• Ongoing support. We offer post-launch support, which includes user training, system maintenance, updates, and technical assistance.

If you decide to build a trading platform with us, we can handle mobile or web app development, cloud development, and product design. Or even better — we’re ready to manage all aspects of the development process, from concept to launch.

Don’t just take our word for it. See the impact of our expertise through a successful project for one of our finance industry clients.

Our Case Study: FIX Simulation Engine for a Trading Platform

Our client, a financial technology and services vendor, sought to integrate their trading software with financial institutions. To achieve this, they needed to implement the FIX (Financial Information eXchange) protocol.

As a solution, GoodCore developed a FIX engine capable of simulating a stock exchange in real time. This software also supports various financial instruments, including:

• Equities
• Options
• Complex algorithmic trades
• Non-standard trading behaviour

As a result, our solution streamlined the FIX Protocol certification process and significantly accelerated the time-to-market for the trading platform.

Willing to discover other success stories? Feel free to check out our portfolio.

Key Takeaways

Learning how to build a trading platform and handling actual development is no small feat. It requires in-depth market knowledge, technical proficiency, and compliance with various regulations.

However, the online trading market is booming. So, don’t miss out on the opportunity to generate substantial profits. Choose the platform type that matches your target audience and requirements, gather a skilled development team, and, ultimately, build a trading platform that will let you thrive.

Need assistance with development, design, testing, or compliance? You can safely count on GoodCore! We’ve been delivering high-quality FinTech solutions for our clients for almost two decades and can surely do the same for you.

FAQs

What is the role of API integration in a trading platform?

API integration connects your trading platform with different systems and data sources. The possible options include: 

• Real-time access to market data
• Price quotes
• News feeds
• Charting tools
• Portfolio management systems
• E-wallets
• DeFi
• Payment gateways

How do I find a target market for my trading platform?

To identify the right target market for your trading platform, consider the following steps:

1. Define your platform’s unique value proposition.
2. Analyse your competitors’ target markets.
3. Determine the type of traders you’d like to attract.
4. Create user personas, i.e., detailed profiles of your ideal users.
5. Gather feedback from potential users to refine your target market.

What business model can I use for my trading platform?

There are several viable business models to consider for your trading platform:

• Commission-based. Charging a fee for each trade
• Subscription-based. Providing access to the platform for a recurring fee
• Data licensing. Selling market data and analytics to third-party apps
• Hybrid model. Combining multiple revenue streams

How do I find a development team for my trading platform?

To find a development team for your trading platform, take the following steps:

• Determine your project requirements: necessary features, tech stack, and related expertise.
• Decide on a suitable cooperation model: dedicated teams, team extension, or in-house development.

Based on that, start looking for potential development partners on online job boards (Indeed, Glassdoor), freelance platforms (Upwork, Fiverr), or developer marketplaces (Clutch, Toptal). You can also seek recommendations from trusted contacts in the FinTech industry. Alternatively, you may skip all these steps and hire a skilled development team at GoodCore.