How to Make Automated Trading Software

How to Make Automated Trading Software

Bohdan Kachur
March 2, 2023

By creating a trading platform, you can benefit greatly as trading is becoming increasingly
popular, especially online trading on particular exchanges. A significant impetus for this was,
in particular, the Covid-19 pandemic. At the moment, we can observe a rapid growth in the
number of exchanges that allow you to buy/sell assets and the number of users of such
businesses. And the best solution for you may be automated trading software, which is now
at the peak of its popularity. This article has collected basic information on what you should
consider when creating such software.

Advantages of automated trading

To understand how to make automated trading software, you should first learn what
automated trading is and why it is popular and necessary nowadays.
As the name implies, some processes in such trading are automated, i.e., performed by a
computer. There are the following advantages:

● Reduces the risk of making decisions based on emotions. As practice shows, a time-
tested strategy often works better in the long run than impulsive trades and
accidentally closed orders.

● It makes faster calculations possible. One way or another, trading stocks and playing
with cryptocurrency rates is not a matter of luck. It is a matter of working with
calculations and developing a strategy. This means that a trader needs to process an
incredible amount of data. A computer can do this much faster and much more
accurately while taking into account a more extensive array of data and thus
increasing the accuracy of the results.

● It allows you to have multiple accounts. This, in turn, will enable traders to test
different theories in parallel and increase the chance of profit.

● It reduces the constant involvement of a trader in the trading process. That is, a person can easily place an order for a short or long trade or even launch a strategy
that will start and stop automatically depending on specific triggers. At the same
time, a person does not have to be constantly in front of a laptop or with a
smartphone in hand — they can do other things.

● Trading can be continuous. Unlike humans, computers have no restrictions and no
need to sleep, eat, or rest. Therefore, with the help of the tools you can create, a
person can earn money continuously: day and night, while on the road, and so on.

Are there any disadvantages and risks?

If you are thinking about developing automated stock trading software, you should definitely
find out about all the potential risks and disadvantages of the chosen format. And of course,
there are some because, unfortunately, nothing has been invented in the world that is
entirely perfect yet.

So, what are these risks? There are not many of them, and we have compiled them into a
small list:

● The possibility of technical failures. Unfortunately, it is impossible to fully insure
against this, even if you create software close to perfect and test it for bugs as much
as possible. Sometimes failures happen, and your task is to ensure they are as few
as possible.

● The need to understand the technical component. To write an algorithm correctly, a
person will need to have at least some knowledge of the technical aspect of trading
and the functioning of automated trading. As a business, you risk alienating a whole
segment of the target audience that needs to gain the necessary skills to use the
the software you offer.

● The need to make sure that everything works as it should and the likelihood of
erroneous strategies. It is said that mistakes are the best teachers, but when it comes
to large amounts of money usually associated with trading, the cost of failure can be
pretty high. Therefore, before launching a real strategy, a person will need to think
twice and double-check everything.

What to consider during development?

High-quality automated trading software development requires that you take into account at
least the following factors:

● Cybersecurity. Where the stakes are high, the risks are high, which also applies to
data security. There are many lone attackers and even entire criminal organizations
that will try to steal your users’ personal data or take over their capital through
hacking attacks. You need to take care of the multi-level protection of your software,
including setting up two-factor authentication, securing your servers, and filtering
traffic to protect against DDoS attacks.

● Cryptocurrencies. The cryptocurrency market is one of the most promising areas for
the development of trading software. Every year, the cryptocurrency market is
growing, and more and more services offer cryptocurrency as a payment method.
Traders can significantly benefit from fluctuations in the exchange rate of Bitcoin and
other similar currencies.

● Convenient cash flow. The more convenient it is for traders to deposit and withdraw
funds from your platform, the better. This reduces the so-called friction and allows a
person to move on to the process of direct trading as soon as possible.

● Mobile version. The Mobile First methodology is now gaining momentum in the world.
In short, according to this methodology, any software should, first of all, be built as a
mobile version – an application or at least a website with a mobile version — and only
then proceed to the development of a desktop version. The share of smartphones
currently far exceeds the percentage of desktops in the world. That is, people use
small screens more than large ones. As a business, you should consider this to offer
your users the most convenient way to interact with your software.

● Machine learning and cloud technologies. You can use these trending technologies
in your software. And we are talking about it not just because it is popular but
because it can really improve the functionality and usability of your future software. In
particular, machine learning will help optimize traders’ algorithms and offer them
more profitable strategies over time.

● Earning options. Despite the fact that there is currently a trend to reduce or eliminate
commissions for transactions on the platform, this is still one of the most profitable

ways for traders to make money on software. By taking a percentage of transactions,
you ensure that the development benefits in principle. However, you can also
consider alternative income options: from consulting services for traders to
advertising or conducting trading courses based on your platform.

Who can help me create software for automated trading?

Fintatech offers you its services. We specialize in trading software and will happily use our
experience to develop your product. And our Trading Platform Designer, which provides
ample opportunities for customization, will speed up the process.
Sign up for a consultation to discuss all the details with our specialists.

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