How to Build a Custom Trading Platform

Developing a trading platform means building a high-traffic ecosystem, where a 10-millisecond delay can cost millions, and a security flaw can ruin your reputation. Below, we'll explain how to build a trading platform, describe the development process, and share insights on which cutting-edge technologies can help your product achieve market leadership.

What Is a Trading Platform 

A trading platform is a software suite that serves as a bridge between a private investor/institutional player and the financial market. These solutions aggregate liquidity from multiple providers and provide real-time data visualization. They are also characterized by the ability to process thousands of transactions per second through an execution engine, which is precisely what a development team should focus on.

Types of Trading Platforms 

The choice of platform format determines how users will interact with it.

Web platforms

Web terminals remain a favorite among active traders. Their main advantage is no need for software downloads and the rapid update of functionality for all users simultaneously.

Mobile trading apps

As more and more retail trades are conducted via smartphones every year, such solutions, through push notifications about margin calls or target price achievement, are extremely effective in retaining end users.

Multi-asset platforms

As modern traders seek to diversify their portfolios across stocks, cryptocurrencies, forex, and commodities, they want to have all the information about their assets in a single window. Actually, thanks to this feature, such solutions typically have a high LTV.

Key Features of a Trading Platform 

To launch an MVP, you'll need to ensure the most reliable foundation possible.

User management

This includes the functionality for entering and remembering logins and passwords, a personal account (with a profile, transaction history, and notification settings), KYC/AML modules (for automated document verification and licensing), and access rights management (usually for traders, analysts, and risk managers).

Trading and order execution 

The platform will be based on a matching engine that recognizes order types (market, limit, stop-loss, and trailing stop). It's also worth considering implementing smart order routing logic, which will automatically find the best prices for users if your platform is connected to multiple liquidity providers.

Market data and analytics 

Here, you need to implement charts with real-time quotes (via integrations with data providers like Bloomberg, Refinitiv, and CoinMarketCap), as well as candlestick charts with indicators like RSI and MACD, and Fibonacci levels. As for the dashboard, it needs to visualize the portfolio and calculations of profit and loss in real time, while taking into account fees.

Security and compliance 

In fintech, security requires the use of TLS/SSL protocols for all communication channels, the introduction of two-factor authentication, and the implementation of DDoS protection (for example, through traffic proxying and infrastructure-level filtering). Additionally, you’ll need to ensure compliance with PCI DSS standards (if your platform will be handling bank cards) and local regulations such as the SEC/FCA/CySEC.

Trading Platform Development Process 

Che IT Group adheres to a structured approach that minimizes the risk of budget burnout and ensures that you receive a product that is ready for market realities. So, let’s find out how to build a stock trading platform below.

Step 1. Business analysis and goals 

You and your team need to understand whether this will be a platform for institutional investors focused on FIX protocols or a gamified app for the Robinhood generation. This will help you define project KPIs, understand which jurisdictions require licensing, and develop clear technical specifications.

Step 2. Product definition 

Now it’s important to determine what features the product will have.

Platform type and assets 

Cryptocurrency exchanges need an understanding of the types of crypto wallets they should have (cold or hot). For Forex, integration with MetaTrader bridges or the creation of a custom liquidity gateway will be required.

User roles 

Here, access levels need to be defined: while a trader needs a terminal, an administrator will need a limit management panel, and a compliance officer will need transaction audit tools.

Core features 

At this stage, it's worth abandoning secondary functionality and focusing on execution speed and the stability of the quote flow.

Monetization model 

These could be transaction fees, subscriptions to advanced analytics, spreads, or withdrawal fees.

Step 3. UI UX design 

Users shouldn't make mistakes (for example, confusing Buy and Sell) in a stressful situation – that's why it's crucial to design the interface so that the most important data is immediately accessible. As for the dashboard, it's essential to implement responsive charts that don't lag even with 50+ indicators.

Step 4. Tech stack and integrations

This is the stage where architectural decisions are made.

Frontend and backend 

For the backend, we often choose Go or Java/C# because they provide multithreading and low latency when processing transactions. As for the frontend, it's usually built on React to achieve top-notch speed and responsiveness.

APIs and data providers 

In this step, the team must set up integrations with external worlds via REST, WebSockets, and FIX, as well as connect liquidity and data providers.

Infrastructure and cloud 

To achieve maximum fault tolerance, trading platform software development teams typically use AWS or Google Cloud with Kubernetes. This ensures that if millions of traders flood the market during a major news release, the system will automatically increase the number of servers.

Step 5. MVP development 

The MVP includes authorization, a basic chart, the ability to open/close a deal, and a simple matching engine – this will be enough to enter the market or closed beta testing and receive feedback from real traders.

Step 6. Testing and QA

At this stage, the team should focus on load testing, simulating extreme volatility, as well as security (this is done through a series of penetration tests and smart contract audits if there is a blockchain component).

Step 7. Launch and scaling 

Finally, the team must set up alert systems that will immediately report any execution delays, as well as ensure scalability, including adding new regions, order types, AI assistants, and more.

Advanced Technologies in Trading Platforms 

To ensure your platform doesn't become obsolete on release day, it makes sense to use the following technologies.

AI and analytics

AI can be used to implement smart chatbots, smart sentiment analysis of assets, personalization (even down to the risks of buying a particular asset), and the detection of abnormal trading patterns.

Blockchain

Blockchain opens up the possibility of trading fractional shares of real assets (stocks, real estate, gold, etc.) through smart contracts, instant settlement (to eliminate the expensive $T+2$ settlement model), and transparent transaction auditing.

Cloud solutions

To prevent your trading platform from crashing under increased workload, it can be based on a serverless architecture or microservices to enable module updates/adding without stopping the entire system. Geo-redundancy, which involves deploying nodes in different regions, is also worth considering – this way, you’ll be able to guarantee minimal ping for traders from anywhere in the world.

Benefits of Custom Trading Software 

Using ready-made solutions will allow you to launch an MVP, but will limit your ability to maintain the platform's viability in the long run. Therefore, from a budget-conscious perspective, it's far better to build a trading platform following the custom approach, as it offers the following advantages.

Customization

A custom approach allows you to implement unique loyalty mechanics and referral systems, create specific order types unavailable to competitors, and build the interface to stand out in a crowded market.

Scalability

As your project grows from 1,000 to 1,000,000 users, a custom architecture will be able to adapt to new workloads easily – for example, through horizontal scaling (by adding new servers as the load increases). Customization also implies multi-asset readiness, meaning your platform can start by supporting only cryptocurrencies and then expand to include options, stocks, or ETFs without rewriting the core.

Security 

Your technical team will have complete control over everything, including encryption and key management protocols. They will also be able to create isolated environments for storing user data and ensure full compliance with the jurisdiction's standards, including GDPR, MiFID II, and others.

Performance

Your team will be able to optimize the matching engine to ensure millisecond order processing and implement binary data transfer protocols instead of heavy JSON formats, where maximum speed is essential.

Best Practices for Trading Platform Development 

Over the years of working in Fintech, we've developed a universal approach on how to create a trading platform. It allows our clients to enter the market as quickly as possible and avoid losing funds due to technical failures.

Clear requirements

Every order execution condition and every integration with a payment gateway must be documented before development begins. To achieve this, we build a requirements traceability matrix to prevent situations where the system doesn't support a specific exchange protocol.

User-focused design

Trading is stressful for users, while an intuitive interface should reduce this stress and not increase it. For this, we conduct usability tests and UX research with real traders. We also focus on minimizing the number of clicks required to complete a trade and the visual hierarchy of alerts.

Security-first approach

We don't add security as an afterthought, but rather build the architecture around it, guided by the zero-trust principle. According to this, each internal microservice must confirm its authorization. We also perform regular dependency scanning and automated vulnerability testing in the CI/CD pipeline.

Trading Platform Market Overview 

Let's start with the market leaders who have succeeded. First up is Interactive Brokers, whose platform's success is due to commission-free trading on US stocks and ETFs, competitive margin rates (up to 34%), and top-notch security. Also worth mentioning is Israeli eToro, a leader in the social trading niche, which boasts a CopyTrader feature that allows for the replication of experienced investors' trades in real time.

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At the same time, even huge investment budgets in a platform don't save it if its core features are flawed. For example, FTX tarnished its reputation for security and ethics in 2022: due to a lack of internal controls and bugs in its code, the platform was able to commingle client funds with those of its subsidiary. Robinhood is also considered a textbook example of failure, having repeatedly crashed during peak volatility periods for the GameStop and Dogecoin cryptocurrencies in 2020-2021, leaving traders unable to close their positions and losing millions. This resulted in fines totaling over $65 million from the SEC and the loss of loyalty from hundreds of thousands of users.

Che IT Group Expertise in Trading Platform Development

Che IT Group is a team that:

• Creates custom matching engines capable of processing hundreds of thousands of orders per second with the lowest possible latency;
• Expertly understands MiFID II, GDPR, and PCI DSS requirements, ensuring third-party audits are passed on the first try;
• Have specialists with extensive experience in mathematical modeling and financial engineering.

Would you like to delegate the implementation of your business idea to a team that has huge experience in trading platform development? Just book call!