Step-by-Step Tutorial on Making Your Own Robinhood-Style Trading App in 2023

Step-by-Step Tutorial on Making Your Own Robinhood-Style Trading App in 2023
Step-by-Step Tutorial on Making Your Own Robinhood-Style Trading App in 2023

Within a few years of its 2013 introduction, the trading app Robinhood received praise and notable investments. The business endeavor provided commission-free exchange-traded fund (ETF) and stock trading. The younger generation and prospective investors who were willing to invest in stocks and ETFs without having to pay brokerage fees were drawn to their no brokerage fee.

Moreover, even inexperienced investors may easily start trading with Robinhood because to its user-friendly smartphone app and intuitive layout. The success of the trading software was attributed to its user-friendly style, strong features, and accessible design, which also removed complexity from the investment process.

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How do Stock Trading Apps Work?

How do Stock Trading Apps Work?
How do Stock Trading Apps Work?

Users of trading apps can purchase and sell financial assets such as stocks, mutual funds, ETFs, cryptocurrencies, and more. Trading apps function as a platform for investors. These apps help users every step of the way, from setting up accounts to trading and placing orders.

They also show current market data, such as stock prices, indexes, and other pertinent financial data. To assist investors in making wise judgments, they provide technical analysis tools, charts, research reports, and portfolio management capabilities.

Users can place a variety of orders through the app, including limit, market, stop-loss, and more. The terms and conditions under which users can purchase or sell assets are outlined in these orders.

Nonetheless, there is a vast array of features available in online trading apps. They can be developed for a variety of uses, and their functionality can be increased or decreased based on your intended service, user base, and business needs.

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Market Analysis of Trading Apps Like Robinhood

Market Analysis of Trading Apps Like Robinhood
Market Analysis of Trading Apps Like Robinhood

Robinhood generated 565 million USD in revenue during the second quarter of 2021 and 380 million USD in the last quarter of 2022.

15.9 million people were active on Robinhood as of 2022, and the number is growing every day. Robinhood is used by over 15 million investors for trading and investing. The market demand for fintech apps and their potential for growth is shown by these statistics.

But Robinhood by itself is insufficient to demonstrate the market’s potential. These additional figures demonstrate the effectiveness of trading platforms.

  • The global internet trading platform market was valued at USD 9.32 billion in 2022. By 2023, it is expected to reach USD 9.94 billion, and by 2030, it will reach USD 15.34 billion.
  • From 2022 to 2030, the market is expected to develop at a compound annual growth rate (CAGR) of 6.4%.
  • Following the release of trading applications, investors in stocks and other financial assets could be those with as little as a passing knowledge of trading. An even larger population that was unable to obtain help from traditional brokerage services now had access to investing because of these apps.
  • With every year that goes along, there is a greater and greater need for personalized trading platforms. Governmental and nonprofit organizations are advancing the need and identifying pertinent solutions to satisfy it.
  • The trading application market is currently very competitive, with startups and well-established financial institutions fighting for market share. To stay current, well-known broker banks have created their applications and made investments in trading app development.

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What are the Must-have Features of Trading Apps?

What are the Must-have Features of Trading Apps?
What are the Must-have Features of Trading Apps?

Apps for stock trading offer a wide range of features designed to satisfy the needs and expectations of users. To give you an idea of the layout, here is a summary of the most useful elements.

User Verification
You must provide a simple and secure login option in your trading app. Users should be able to register using a variety of methods, such as their phone number, email address, username and password for biometrics, social media networking sites, etc.

Government-approved trade protocols, guidelines, and regulations must be a part of the authentication. It should make it possible for users to create and utilize their accounts in accordance with these guidelines.

Front panel
The dashboard is a crucial component, and to make an educational and user-friendly app dashboard, you need to work with knowledgeable developers. Your users should be able to access the dashboard straight from the app homepage when using the app.

Important information such as the watchlist, balance, holdings, charts, order status, user details, etc. should be displayed on the dashboard. Steer clear of packing the page with too much information and needless features. Make sure it is clear and concise.

Management of Investment Portfolios
Without the use of a broker or other third-party agent, customers can construct and maintain their investment portfolios using the investment portfolio management function. Viewing and managing their assets, transaction history, gains, losses, and overall portfolio performance will be possible for users.

Stock Market Functionality
It is an essential feature that your stock trading must have. Users can trade stocks and carry out associated duties with the help of the stock trading feature. The function simplifies the buying, selling, and holding of stocks.

Lookup & Sort
Investor trading will be made simpler by this feature. After removing superfluous information from the ledger, they can better organize their thoughts and evaluate stocks and their trading history. They will spend less time looking for pertinent information if they filter and sort. You have to make sure that it remains in your application.

Investors can use Watchlist to add their preferred stocks to a wishlist for potential future acquisitions. They can use this to list specific stocks, monitor their progress, and avoid having to look for them one at a time.

Media & News
It is important for traders to keep up with happenings that are happening in the market right now. For your app to offer real-time trade news and market analysis from reliable sources, it must include an integrated newsfeed. Investors can use the information to help them make well-informed investing decisions.

Management of Transactions
To enable online payments, you need to maintain functionality for managing transactions and integrating them with payment gateways. Use best security practises to protect this feature, and only allow users and administrators access to the data.

Order Routing Directly
It is a sophisticated function that provides trading recommendations. This feature is linked to an algorithm that retrieves information from multiple financial sources and offers recommendations based on that information. Investors can look over these recommendations and use the best one to place the transaction.

Notifications and Memos
Real-time alerts such as push notifications and reminders advise traders of the most recent developments. They provide details on a variety of topics, including news updates, account activity, dividend announcements, earnings tracking, and fluctuations in stock prices.

But maintain this feature’s organization so that it doesn’t send out notifications at random. Users must be able to receive and receive critical information from it.

Other noteworthy features of stock trading platforms include user registration, real-time data, watchlists, charts, transaction history and statements, research tools, customer assistance, etc

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How to Create a Stock Trading App Like Robinhood?

How to Create a Stock Trading App Like Robinhood?
How to Create a Stock Trading App Like Robinhood?

The following are the key steps in the development of a trading app:

Investigate and Discover
To determine the demands, viewpoints, and behaviors of your target audience, conduct in-depth market research. Additionally, learn more about the stock trading applications that are currently available, investigate and analyze the techniques of competitors, and comprehend the current and future market trends, ups and downs, and possible growth prospects.

Finally, get more feedback on your app idea from investors and potential customers to confirm market conditions and demand.

Describe the App’s Goals
Project objectives should be demonstrated, along with key features, app layout, target market, kind of trading app, user needs, technical specifications, duration, budget, and so on. Prioritize key goals when you plan the next steps and select a development strategy.

Select Design and Development Approaches.
Gain a thorough understanding of your project and utilize wireframes and prototypes to show the user interface (UI) and experience of the app. You can use the tech stack from Robinhood as an example.

Select the technological stack that includes the libraries, third-party APIs, programming languages, frameworks, and other tools required for particular functionalities. Finally, make iterations to the design depending on user testing and feedback.

Onboard Trading App Development Team
Development of Trading Apps on Board The creation of a team trading app is not a task for the amateur. It entails server setup, API integration, security measure installation, back-end and front-end development, and many more intricate activities.

You cannot complete these tasks on your own, even with technological expertise. To complete the project, you should appoint specialized mobile app developers. Additionally, while hiring, make sure your team is knowledgeable on development methodologies and practices.

Publishing & Quality Testing
Thorough testing should be done when the trading app is developed in order to find bugs, malicious programs, technological faults, broken links, and other security risks. Resolve these issues and safeguard the app with tried-and-true security procedures. After that, submit the app to app shops like the Apple App Store and Google Play Store.

Upkeep and Technical Assistance
Comply with all applicable laws and regulations before launching a trading app, and monitor its performance and user input afterward. Along with it, update the program frequently, address problems, add new features, and enhance its functionality and speed.

Additionally, keep up with the most recent regulatory and financial industry changes so that you can adapt your app appropriately. To get the intended outcomes, follow the procedure.

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How Does the App for Stock Trading Profit?

How Does the App for Stock Trading Profit?
How Does the App for Stock Trading Profit?

One of the first traders to use commission-free trading was Robin Hood. Young and prospective investors who were eager to make money through trading and investing were drawn to it by its no-commission fee structure. Furthermore, opening and maintaining an account with Robinhood is free of charge. Investors are not charged for transferring funds.

You may be wondering how Robinhood makes money given that it is free to use. To make money, the fintech company uses a variety of different revenue stream types. The most noteworthy models are listed below.

Flow of Payment for Orders
Money for the Order Fintech apps employs flow, a common practice in the brokerage business, to generate revenue. Trading apps sell their customers’ trade orders to market makers on their behalf under the PFOF model.

The brokerage for the order flow to trading applications is paid by these market makers. Market makers execute this trade in exchange for a tiny spread on the bid and ask prices of the traded assets, which they profit from.

Through the PFOF concept, market makers and stock trading applications both receive a modest amount; but, if they execute several orders, they receive a considerable amount and increase their revenue.

High-end offerings or subscriptions
Fintech apps charge its customers on a monthly and annual basis for premium services or subscriptions at exorbitant prices. These premium services come with added perks, low-cost margin investment options, research papers, market data, investment advice, and investment tools.

Interest on Margin Loans and Securities
Trading apps that offer securities and margin loans, such as Robinhood, pique users’ attention. They impose a high-interest rate on margin loans that are larger than $1000. Lending securities to their counterparties is how they make money.

Generation of Revenue From Unused Amount
Trading platforms transfer funds to savings banks from investors’ accounts. They make money by charging interest, which increases their earnings. Still, it’s minuscule in comparison to alternative revenue models.

Different Income Models
Additionally, trading platforms offer commissions for user recommendations and collaborate with other financial services, broker firms, or businesses. To raise money, they offer market data, take sponsorships, and advertise outside services.

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How to Ensure Trading App Security with Best Practices?

How to Ensure Trading App Security with Best Practices?
How to Ensure Trading App Security with Best Practices?

Trading apps deal with investors’ stock holdings and high-value financial transactions. These properties are extremely susceptible to theft, hacking, and cyber threats. When working with sensitive financial data and transactions, you need to exercise caution. To keep the safety threats at bay, adhere to these security procedures as well.

Sufficient Security Procedures
To guard against vulnerabilities in the software, such as SQL injection, Cross-Site Scripting (XSS), and Cross-Site Request Forgery (CSRF), you should put common security practices into place. Update the codebase to fix any vulnerable places aside from that.

Data Security
Data encryption uses protocols such as HTTPS to implement algorithms that convert data into codes. These codes are restricted to the designated recipient and are safe. It shields private data from being intercepted when the server and the app are communicating. Additionally, it encrypts private information stored in the database to guard against data breaches and illegal access.

Authentication using two factors
It takes more than just a username and password to secure the trading software against cyberattacks. It is necessary to have a two-factor authentication option and allow investors to enter their fingerprints, email addresses, phone numbers, and facial recognition. Tight security will be maintained during trade, transactions, and communication thanks to this practice.

User Data Protection
To prevent unnecessary storage and data leaks, store just the necessary user data and practice data minimization. Respect user privacy by adhering to data protection laws, such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR). Set up thorough monitoring and logging in conjunction with it to quickly identify and address any potential security issues.

Controlled Access by Role
A security technique called role-based access control helps restrict system access to certain users by taking into account the roles that have been allocated to them. Full access to everyone is limited in the RBAC system by granting access permission based on the user’s designated role. Using this method provides a scalable and organized approach to control permissions and access within the application.

Routine Security Evaluations
Perform routine security audits and penetration tests to find and fix any possible vulnerabilities in the architecture and programming of your application. You can prevent hacking, phishing, cyberattacks, bugs, data leaks, and illegal access by conducting regular security audits.

Put Secure Session Management into Practise
To guarantee seamless operations and prevent theft and forgeries, use secure session management techniques. As you manage operations and app activities, make use of session tokens, session timeouts, and expiration of inactive sessions.

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How Can Alphonic Help You Build A Trading App Like Robinhood?

How Can Alphonic Help You Build A Trading App Like Robinhood?
How Can Alphonic Help You Build A Trading App Like Robinhood?

In summary, there are several benefits to investing in the creation of trading apps, from improved brand recognition to varied revenue streams. In addition, well-designed trading software has the power to revolutionize both financial institutions and your company. To transfer the burden, though, you must work with a reputable trading app development business.

Alphonic offers tools, knowledge, and an organized development approach to assist you in creating a trading app. We are a well-known fintech company that helps entrepreneurs create and release trading applications. Our talented design and development team can integrate cutting-edge features, produce solid backend infrastructure, and build aesthetically pleasing user interfaces.

Our professionals have extensive experience putting strong security measures in place to safeguard sensitive data, user information, and financial transactions. In addition, our staff offers specialized support and maintenance services to guarantee smooth operations and assist you with game publishing.

To design your trading app using the greatest tactics in the business, get in touch with the Alphonic experienced team.

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