Creating a Trading Simulation Platform
The last decades have brought about hundreds of trading platforms, and for good reason: The trading volume has been growing constantly for decades, and the number of market participants has grown in line with this trend. Why and how I am building an additional trading platform, is the subject of this article.
Why develop a new platform?
The Business Perspective
Most major brokers in the market feature stunning user interfaces, with system integrations allowing the user to find up-to-date information on virtually any financial product out there. As such, building a competing system as a solo developer is neither feasible not economically wise. However, web and mobile applications developed by brokers for the retail market tend to focus on beautiful user interfaces, while software developed for professional and institutional investors can be overwhelming for end users from a business perspective. On the other end of the spectrum, we have highly technical APIs and libraries used by Python or C++ developers, which will focus on certain KPIs or market indicators, while making it difficult to understand the implication of different tax systems, currency fluctuations and transaction fees, in the average return for retail investors. Personal Finance is yet another level that will be difficult to incorporate into the analytics tools of even advanced retail brokers and fintechs. Most people are usually not lucky enough to have an inheritance as starting capital, to then start investing at the bottom of a stock market crash to see eye watering returns from day 1. Instead, you may have a certain monthly budget you can or want to invest, with a year end bonus for which you must decide if you invest it as a lump sum or over a certain amount of time. Much studies have been done on these subjects, notably James Montiers’ books on Behavioural Finance, but Fintech products are certainly behind on this in terms of accessible analytics.
The Technical Perspective
While the economic reasons for the trading simulation platform are intriguing, of course there is the entire technical aspect of building a simulation system. Which technology stacks allows the development of a valuable product while featuring a learning experience that makes the development of a usable product possible without hiring a team of developers?
What we build
This article series will focus on the development of a tool which allows the modelling of various finance related business objects without a major impact on the core architecture of the platform. As such, it will draw from similar patterns as existing large scale applications like ERP systems. It will describe which technologies are used in the development of the platform and why, as well as how a deployment of the application may look like. Last but not least, we will explore how we can extend the system to communicate with external systems like brokers and data providers.
How we will develop the system
In the next article, we will explore the technology stack used to build the core of the system.