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A trading platform refers to the software that’s used by traders and investors for placing trades and monitoring accounts via financial intermediaries. Every broker has to have a trading platform, but not necessarily the same one. Some prefer to integrate platforms that already exist in the market while others build their own to cater to the needs of their clients.
It’s a good idea to build your own trading platform because it gives brokers the opportunity to develop a platform that fulfills the requirements of their target market. The best trading platforms are designed to assist investors in executing their trades effectively by implementing strategies to maximize their returns.
Traditional Trading Platform Types
There are dozens (if not hundreds) of trading platforms out there in both offline and online worlds. However, all of them fall into two major categories depending on the types of trading assets they deal in.
- Trading Platform for Traditional Assets
All traditional platforms for trading assist traders in investing their finances into time-sensitive assets such as ETFs, mutual funds, options, stocks, bonds, futures, precious metals, and other currencies. There is massive competition in the trading platform industry between various multi-asset platforms. However, some customizable platforms can be tailored to a specific financial trading sector such as the futures market, bond markets, etc.
- Trading Platform for Cryptocurrencies
Cryptocurrencies trading platforms, as the name suggests, facilitate the investment, trading, selling, and buying of digital currencies such as Bitcoin, Ethereum, Litecoin, NEM, and many other popular cryptocurrencies globally. They operate as exchanges that are responsible for carrying out smooth transactions of cryptocurrencies. Additionally, cryptocurrency trading platforms equip their users with some powerful analytical tools to gauge their investment opportunities and make well-informed trading decisions.
Models of Cryptocurrency Exchange
There are two significant models you’ll find in the world of cryptocurrency trading platforms or exchanges.
- CEX – Centralized Crypto Exchange
CEX, or Centralized Crypto Exchange, is currently a cryptocurrency centralized transaction platform that makes the major of the market’s share for digital trading currencies globally. However, in this type of trading platform model, there is a middleman present. You can think of it as an interactive digital broker who is responsible for the execution of all types of transactions, services charges, and any other relevant fees for the services provided by the trading platform.
However, it’s worth noting that most conventional trading platforms for futures, stocks, or other traditional assets stick to the idea of centralized trading and the use of intermediary services. Whereas DEX, or Decentralized Crypto Exchange-based trading exchanges, facilitate peer-to-peer transactions. These trading platforms don’t require or rely on intermediaries or middlemen of any kind, which means service charges or fees are almost non-existent. Addittionally, Decentralized Crypto Exchange trading platforms don’t require any sensitive information or personal information such as documentation as proof of your identity.
Any transactions that are executed using DEX platforms are transparent, anonymous, and more secure, as the traders’ dealings are private and all communications and transactions happen between them with no third-party involved, whatsoever. You’ll be surprised to know that despite all these advantages and unique features, DEX currently captures only 19% of the trading platforms’ ecosystem globally and even lower trading volumes of less than 1%.
When it comes to liquidity and speed, DEX-based trading platforms lag extensively behind their CEX-based counterparts. Because DEX platforms are slow, users can end up missing out on a potentially profitable opportunity. We know time is money, so this disadvantage of lack of speed plays a critical role in why DEX platforms fall short for millions of cryptocurrency traders and investors.
So, how do you build a trading platform? You can do it by adding some of the following features to your trading platform:
- Free demo accounts
First and foremost, you should always add the option of free demo accounts to your trading platform. It enables users to try out the platform before they have invested any money to see if they can use it skillfully or whether there are any issues. You can offer the account for a limited time period and enable potential customers to trade risk-free.
- Automated order execution
We are living in a technologically advanced world, and you have the option of incorporating automated order execution for your trades. They can create a trading strategy and use the auto-trading feature to delegate the execution of orders. It’s extremely beneficial for traders because it can eliminate their need to monitor markets around the clock.
- Live charts
Feature-rich charts can be incredibly helpful for traders because they help them in making informed and good decisions when it comes to trading. Your trading platform should have live charts that are updated regularly, and it’s best to let your clients customize the settings based on their preferences. This can assist your clients in using the indicators they want and implement a successful trading strategy. If you check the XTRgate platforms review, you’ll notice that they provide live charts for facilitating their customers, as all reputable brokers do.
- Economic calendar
An element of fundamental analysis, no trading platform is complete without the addition of an economic calendar. This tool highlights important global events that can have an impact on financial markets. Traders have the freedom to choose currency, timezone, timeline, and importance of events. Adding this tool can be immensely useful for traders because it enables them to make smart decisions.
- Low entry costs and minimal fees
If you want your trading platform to be widely adopted, i’s a good idea to keep entry costs low. Opt for zero initial minimum investment, and don’t charge extremely high commission or spreads for every executed trade.
- Multi-factor authentication
Security should be a top priority when you’re developing a trading platform. Multi-factor authentication can add a layer of protection, which includes a unique username and password, along with confirming identity by entering a code or answering a question.
Trading Platform Apps
We live in the era of mobility. Therefore, every business and trading company as a mobile app these days. Cryptocurrency is all about digital trading; therefore, the need for a mobile trading platform app becomes inevitable. However, no matter what type, size, and assets a trading platform deals in, a trading platform must have certain features.
Multifactor authentication is the top of the list. Security is the top concern when it comes to any kind of online transaction. Therefore it should be your number one concern while designing a trading platform mobile app. It is highly recommended that your app has a multi-factor authentication security feature. It adds an extra layer of security protocols to protect your users’ crypto assets.
In addition to entering a username and password, a user must also enter additional information to verify their identity. It can be a combination of one or more pieces of information that only a legitimate user will remember, such as answering a security question. Another way is to set up a security code option that is sent to the user’s email or mobile phone via SMS. Some advance apps also use security features such as biometric authentication. However, it all depends on various factors such as your budget and how secure you want your trading platform to be.
You must also make sure that the interface of your trading platform’s app is user-friendly, highly customizable, and visually rich. A poorly designed app can come across as unappealing and untrustworthy. When it comes to the features, it must provide all the necessary primary and advanced options such as analytical tools, watch-lists, charts, streaming of quotes, rates of cryptocurrencies across the globe, and the list go on. Do your research to find out what options you must consider in order to cater to all the needs of your customers. Real-time analysis visuals are also a plus as they’ll give your traders a quick overview of what is happening in the global market of cryptocurrency.
Filtering and sorting tools are another feature that customers prefer. It helps them narrow down the financial data they like to be displayed on their screen. It reduces the hassle to go through a plethora of unneeded data to get to the information they’re looking for.
Adding a search bar is another good idea. It gives a quick option to users to simply find whatever information they’re looking for. Also, make sure that you provide comprehensive features in a user profile section of your mobile trading app, which will allow your clients to manage their data, add bank accounts, add credit card accounts, and change their security settings and other preferences.
Consider adding a live news feed to provide users with a real-time overview of the cryptocurrency market. The news feed must also provide the latest updates on news and trends
Before you design and integrate all of these features into your trading platform and app, you must think about the foundation of the trading platform. The first thing you must remember is that it must be capable of scaling with an increasing number of clients because if your trading platform grows in popularity, it will attract more and more cryptocurrency users, traders, and enthusiasts.