The intersection of finance and Tech ; financial technology or fintech has opened up unlimited opportunities for everyone. Anything online that deals with finance is part of financial technology. Financial technology aims to take out the traditional financial services to an online service. Financial technology encapsulates and is not limited to digital lending credit, insurance, cryptocurrency transfers, and trading.
The trading industry has made many stakeholders multimillionaires, it is filled with opportunities and there are challenges faced by stakeholders in the trading world. This is one of the reasons why the trading industry has appealed to diverse investors which includes tech entrepreneurs.
If you are reading this blog post you might be one of the numerous tech entrepreneurs who are seeking an outlet to get involved with trading in order to use modern cutting-edge technology to build products to develop trading. On this page, we will explore and share the best business ideas for tech entrepreneurs in the trading world. Hopefully, we’ll be able to inspire you with this comprehensive guide.
Booming Tech in Trading
Out of every ten people who read this guide, we could place a bet that at least seven people have heard of the company PayPal, a fintech company that deals with the transfer of funds. You might have also heard of Binance, a cryptocurrency trading platform and a household name among crypto traders. These few examples are evidence that tech is revolutionizing finance and it is growing from strength to strength.
Diverse innovative tech trends are transforming the trading landscape. Some of these are:
- Artificial Intelligence (AI) and Machine Language (ML):
When integrated into trading, AI-powered tools can analyze huge datasets, identify patterns, and generate trade signals that are humanly impossible to catch. This game-changer permits near-precise entries and exits, potentially improving trading returns.
- Algorithmic trading platforms:
Algorithm trading platforms are no longer sophisticated and difficult to understand. There is an emergence of user-friendly platforms that help traders build and deploy automated trading strategies for better trading outcomes.
- High-Frequency trading (HFT):
High-frequency trading employs powerful computers and algorithms to carry out trades at high speed. They capitalize on price fluctuations and increase liquidity.
- Blockchain technology:
We bet that cryptocurrency is no more a stranger to you, blockchain technology is behind cryptocurrency and it goes beyond crypto too.
This technology offers a secure and transparent way to record transactions, streamline processes, and potentially lessen settlement times. A more recent application of this technology is the tokenization of traditional assets to open up investment opportunities for everyone.
- Frictionless trading infrastructure:
Brokers are focusing on building these platforms to execute at a faster rate, maintain low commissions, and have easy access to liquidity. Frictionless trading infrastructure caters to every trader, especially those utilizing high-volume strategies.
Trading Business Ideas for Tech Entrepreneurs
Let’s have a look at five (5) lucrative trading business ideas tech entrepreneurs can venture into. We will divide these ideas into two—niche areas and asset classes.
Niche areas
- Algorithmic trading platforms
You could venture into building algorithm trading platforms. These platforms provide the infrastructure to build, test (backtest), and deploy automated trading algorithms. Algorithmic trading platforms help traders to create and deploy trading strategies using code. The most popular options are MetaTrader 4 (MT4) and MetaTrader 5 (MT5), others include NinjaTrader and QuantConnect.
When building your platform you could decide to cater to beginners through visual scripting or cater for those in need of coding knowledge.
- AI-Powered tools
AI-powered tools take algorithm trading platforms a step further, they incorporate machine learning and artificial intelligence to automate decisions within algorithm trading strategies. These tools integrate with algorithmic trading platforms and they can also function separately. Traders need these tools to analyze market data, identify patterns, and generate trade signals. These tools help traders spot opportunities and they are in high demand so venturing into building these tools is another lucrative option for tech entrepreneurs looking to explore trading businesses. Popular examples of these tools are Tickeron and Trade Ideas.
- Frictionless trading infrastructure
This infrastructure focuses on how easy and cost-effective it is to trade. Frictionless trading infrastructure is an environment designed to minimize costs and potential delays in trading. You could develop an infrastructure with added features of low commissions, faster execution speeds, and easier access to liquidity to beat other competitors. This infrastructure is also in high demand as it is attracting traders most notably the high-frequency strategies traders.
Asset classes
- Frictional share trading platforms
You could also venture into this asset-class tech trade business. Just like frictionless trading infrastructure, these platforms focus on making trading easier, though they have a higher cost associated with trading like spreads, commissions, and slow execution times. Casual investors (this is a wide audience) that rarely trade utilize this platform however it is very important that the frictional share trading platform you create has a user-friendly interface.
- Cryptocurrency trading solutions
Specific platforms that have now become so popular cater to this asset class. These platforms are specifically designed for buying and selling cryptocurrencies like Bitcoin, Ethereum, etc. The cryptocurrency market is a billion-dollar industry with millions of traders around the world and you can launch a crypto business in EU or US, and anywhere, so this is in high demand. Some examples are Binance, Coinbase, and Kraken.
Final Thoughts
There is space for everyone in the fintech world and you shouldn’t shy away from exploring the exciting opportunities in the trading business. Before you pick your choice consider researching vigorously—both market research, and understanding the user needs before building. Ensure you adhere to financial regulations when you are about to start your tech trading business and build a hard-working, dedicated team with expertise in finance, technology, and business development. We trust you are going to start your tech trading business soon and as we conclude we wish you all the best. See you at the top.
