How To Build a Stock Trading Platform in 8 Steps

Plan on How to Build a Stock Trading Platform

After Robinhood filed for IPO (though the excitement was a bit short-lived) and the January GameStop event made trading fun, users ran to get into it. At least, in America, apps like Robinhood, Webull Financial, and Fidelity have gotten lots of traction. Soon, European traders will get into trading-through-apps too—solutions the Trade Republic are already getting their rounds led by Sequoia and raising $900M. This article will talk about these solutions and explain how to build a stock trading app in eight steps.

1 Step – Initiate The Project

First, determine the type of your trading app, decide what users will trade with on your platform — stocks, cryptocurrencies, CFD, and ETF are the most common options.

Decide who’ll be the primary audience of your app — expert traders, first-time traders, traders who aren’t particularly good at distinguishing setups or interested only in healthcare stocks, etc. Don’t be tempted to divide your audience by age or gender. Segment them by what pains they have within trading and what jobs your app will allow them to do better. (Like, if that’s an app for intermediate traders, live support or a premium community of more experienced traders will help them hop onto the “advanced” train, etc.) Answers to your questions will become your value proposition (VP).

Study your competitors — apps that serve the same people with the same pains. It’s tempting to attempt threatening E*Crypto or Robinhood. There are other apps like Schwab Mobile (great for beginners), Merrill Edge (that converts cash into stocks automatically from your card), Thinkorswim (that provides a live scanner great for day trading), and so on. Determine what you can do better than them, study reviews of their apps. That’ll help you to refine your positioning.

2 Step – Determine the Scope

Figure out what features will allow you to express your VP most efficiently.

Common features for stock trading platforms are a dashboard with stock charts from stock databases and corresponding company profiles, payment gateways, search, authentication, and user profiles. Through UX research, figure out what users are unhappy with the standard look/feel of these features in other apps, and improve them. (For instance, it’s useful to make an option of paper stock trading — trading with fake money — visible if you target beginners — or to include customization for the way charts look, because lots of people, for instance, like candlestick charts better than bar charts.)

Then, think about more complex features: whether or not your app will provide live updates, will it be possible for users to create watchlists or look up news about companies they follow, will the app offer analytics of the user’s previous trading activity, etc. Lots of fintech apps also offer personalized financial advice, historical data analytics, community-based activities — you choose it.

The more features you decide to implement, the bigger the technical part of the scope.

3 Step – Security Plan For Your App

Security features are also part of the scope, but they deserve a special place in the article.

According to Verizon, 60% of all cybersecurity threats are financially motivated — and the fintech industry is the one good target for hackers.

Have a cybersecurity strategy from the beginning: from password policies and multi-factor authentication to automatic logouts and warnings to users about not reusing their passwords. Otherwise, things aren’t going to look pretty.

Don’t forget about encryption, PCI DSS, and requirements from your industry regulators you’ll need to comply with (SEC is one of those in America).

4 Step – Onboard Development Team

For the stock trading app, you’ll need

  • UX/UI designer to help with prototyping/design.
  • Back-end programmers who specialize in Python, Java, Node.js, or Ruby; who worked with stock trading APIs like Alpaca; payment gateways; API management tools like Postman; PaaS tools like AWS, Azure, or Heroku.
  • Front-end programmers (f.i., JavaScript or ReactJS devs).
  • Mobile developers (Swift for Apple, Java/Kotlin for Android — or, if you’ll choose the cross-platform way — React Native, Flutter, NativeScript, etc.)
  • Cybersecurity specialists or DevOps folks who will handle security issues, incident reporting, other risk-management- and threat detection things.

Hire people who already have experience either in fintech or in other heavily regulated industries.

5 Step – Choose PaaS and MBaaS Platforms

There are two types of cloud services managed by a third party and are a good fit for fintech solutions: PaaS (Platform-as-a-Service) like AWS Elastic Beanstalk, Microsoft Azure, Salesforce — and MBaaS (for mobile development, Mobile-Backend-as-a-Service) like AWS Amplify and Azure Mobile Apps.

If you got intimidated by the sheer amount of specialists required to build a platform — and want to create just a small mobile trading app, AWS Amplify will build a backend for it and help your, e.g., React Native developer connect various APIs to the project. PaaS providers like Azure help you manage the runtime of a trading platform, middleware, servers, networking, and storage.

6 Step – Use a Reliable 3rd Party API Solution

Many stock trading APIs exist: Alpaca Market has already been mentioned, and it’s free. There are also Robinhood API (also free, but often can’t handle the trader volumes), Polygon APIs (there is a free option and packages from $99/m to $499/m), and many others.

Choose according to what kinds of data you want, if you want WebSockets and snapshots, whether or not there is enough info in the developer communities about working with those APIs. Search for security incidents related to APIs you want to use.

7 Step – Create User-Friendly Interface – (UI)

The survey says, 48% of users believe visual design is important whenever assessing website credibility. Credibility is vital for fintech solutions. Also, stock trading is already kind of intimidating and overloaded with cluttered visuals.

Fix that perception by creating a simplistic, accessible UI with distinct typography, easily understandable navigation, and data visualization that doesn’t make users want to cry (especially if that’s an app for beginners.)

8 Step – Develop, Test and Deploy Your App

Implement continuous integration and delivery into the development process. You’ll manage to optimize time for after-testing bug fixing by integrating it into programming (in other words, you’ll test extensively while you’re developing.)

Don’t forget about user testing. It’s better to include it at every milestone of your development — after you developed your most important features, integrated the analytics, polished your UX. That is necessary for staying in contact with your customers instead of being stuck in the development loop — and that will allow you to build a truly user-centric trading app.