Prop Trading Software
Trading business is a field where it is possible to make money relatively quickly, starting from a small base capital. Prop trading is part of this sphere: advanced software and modern trading tools will support a fresh idea or a well-established strategy, simplifying and speeding up the execution of secure processes. Platforms running on high-performance capacitive servers serve up to 50-200 thousand accounts per environment. Flexible API support to integrate processes and ensure seamless asset management according to objectives and applicable standards with monitoring dashboards - an excellent basis for analyzing business success and strategies for business progress.
Prop platform automation is not only suitable for trading fiat, derivatives and equities. The list of operating assets in a particular ecosystem includes:
Traders consider the availability of funds and what distribution model formulas the owners use, how advanced and new the prop trading software is. The interface under the browser version, cross-platform and mobile applications should be clear, crisp and responsive to commands. Tools that eliminate and prevent rate slippage to avoid financial losses on trades, narrow spreads that match market boundaries, copying profitable trades from leaders, and multiple payment gateways with advanced trade processors enhance CRM capabilities.
| Operating amount under management, $ | Profitability level, % | Total profit, $ | Commission, % | Trader's income, $ |
| 1000 | 72 | 720 | 50 | 360 |
| 2000 | 54 | 1080 | 60 | 432 |
| 5000 | 34 | 1700 | 75 | 425 |
| 10000 | 49 | 4900 | 70 | 1470 |
| 20000 | 68 | 13600 | 55 | 6120 |
| 50000 | 52 | 26000 | 60 | 10400 |
| 100000 | 29 | 29000 | 80 | 5800 |
The level of profitability of traders' business a priori decreases slightly when increasing the total assets provided for management, because up to 30% of transactions will be unprofitable. If a trader with $1000 showed profitability of 72%, then gradual provision of funds to him up to $50 thousand will provide a profit of 50% and higher, bringing to $26 thousand income (40% of the total profit). If the trader managing $100 thousand showed 29% profitability, his remuneration is reduced to 20% or $5800.
The commission charged by the broker can vary greatly, being within 50-80%. Therefore, the total income of a successful trader, who has $50 thousand at his disposal, will be higher by $4.6 thousand than that of the one who has profitability less in 2 times, but has $100 thousand at his disposal.
Here is the mathematical background of the proprietary trading technology: money given to management is returned with greater or lesser profit thanks to the well-established work of CRM system and the platform tools themselves. At the first stage of trader selection, serious companies perform KYC-checking - and it is easier to do it in automatic mode. Further, the built-in change of rating and % of remuneration can also be partially regulated by the system, taking into account increases in % of profitability and exceeding a certain threshold of profit in units of value (global reserve currencies, growing or low-volatility crypto).
Such functionality makes it easy for several dealing centers and broker systems to work together, including, in addition to the usual ones, a hybrid model of placing several trading software on one server. Integration of various applications into the platform creates a unified trading ecosystem. The backend structure includes many charts and histograms, indicators and customizable graphic editors for drawing. Additional convenience is provided by services:
Embedded tools used in the software development process include:
MAM- and PAMM-accounts modules, IB provide creation of 50 and more structure levels, web-sockets - streaming of quotes. In the format of interval candlesticks the graphical data display is exported. The functionality is complemented by automatic evaluation of KPIs using the module, client bonus systems in fixed and percentage format, history of financial managers' actions and comparative profitability of brokers and traders. This is very similar to binary options software except that the platforms interact with licensed brokers. Aslo, trading systems are adapted to MT4 and MT5, cTrader and xStation platforms, embedding indicators for monitoring account profitability.
Bridges connect platforms to multiple vendor liquidity pools LMAX or Currenex, CFH and xStation, Match-Trader and Utip, which work with the platform and exchanges via an LP connection with the help of a market maker to place orders and run auctions. Hedging settings and its scale are reflected on the monitor, and the multiple LP connection complements the transaction functionality. Thanks to these parameters, routing and the absence of plug-ins on the servers of financial platforms:
Consolidating or combining orders saves time and prevents possible errors. If a continuous execution function is required, large orders are split into parts and executed according to specific time frames. This technique optimizes pricing, raising it to the limit level. The final financial picture is calculated using the weighted average VWAP price. In workflows, the exchange depth of the VWAP, stability and duration of delays, and integration with bridge providers are evaluated using prop-trading tools.
Development of a prop trading platform will cost $40-60 thousand. Depending on the chosen location of prop trading, Merehead also helps to choose and connect hosting in the right location (USA or Singapore, EU countries) and cross-connection, supplemented with protection against DDoS attacks. Permanent updating of functions for clients and investors, brokers and traders with customization of certificates for each type of accounts expands the field of opportunities and increases competition, thus attracting more market participants.
The results can be displayed in a leaderboard so that traders can copy the actions of the best participants to increase their own profits and develop new techniques as a result of identifying patterns. In order to avoid fraud, it is also necessary to stop trades, which imitate successful operations and grid trading in a narrow timeframe. For this purpose, the software uses timeframe analysis, sorting by filters and patterns.
The proprietary style of the proprietary platform involves the implementation of customized specialized software for high-frequency trading, embedding linear, probabilistic and stochastic algorithms. This approach increases the value of the technology stack and provides market advantages due to adaptability, increased privacy protection and back-office integration. The price of this development option with project timelines ranging from 3 months to six months ranges from $60-120k.
The list of connected software includes functions of auto-closing on targets and blocking excessive drawdown, advisors and work without swaps, holding the exchange rate for several days. In addition to classic currency pairs, the software includes synthetic tools where traders offer the exchange of exotic or unusual cryptocurrency-fiat pairs. The task of such a service is to diversify and uniquely characterize the portfolio, increasing profits by reducing business risks.
What is important for clients are the risk indicators and trust rating scores of proprietary companies, the duration of their operation, the amount of leverage and spreads, commissions and analytics, and the availability of the pool of assets. For example, BlackBull Markets has been operating in the trading market for 11 years, the trust level is 78 points out of 99, the number of currency pairs is limited, but there are CFDs. ACG's server is located in the US, but the firm has British-Chinese owners, offshore registration in Seychelles for less than 5 years with a leverage of 1:100. Bybit exchange is 7 years old, leverage is 1:100, there is an opportunity to open different orders for short and long positions) with different leverage. 17.6% of the exchange's clients are Japanese, 9.9% are Americans, 8.9% are Koreans and 8.2% are Germans, which confirms the rating of 9.6 out of 10.
QuanTower with algo-trading functions can be considered as an example of high-quality development of functionality and UI/UX-design. The DOM (“glass”) panel has histograms, stop loss and take profit settings, charts with indicators for market analysis. The ability to customize panels in templates, cluster evaluation on footprints with sellers and buyers, histograms of volume profiles to clarify support and resistance allow you to form trading strategies. Heatmap trading, replays for testing (backtesting) provide modeling and validation of assumptions. Once an idea is confirmed, traders can set up autoplay of earnings models.
| Days | Capital $2500. Utilization period - 30 days. Risk factors - losses up to $83 per day | ||
| I decade | II decade | III decade | |
| 1 | 120 | -180 | 425 |
| 2 | -80 | -215 | -257 |
| 3 | -200 | 306 | -188 |
| 4 | 180 | -486 | -125 |
| 5 | 30 | 512 | -250 |
| 6 | -220 | -189 | 607 |
| 7 | 65 | -196 | -175 |
| 8 | 94 | 59 | 354 |
| 9 | -54 | 78 | -202 |
| 10 | 318 | 195 | -525 |
| Total: | +253 | -116 | -336 |
For the I decade the trader received income of $253, in the II and III decades respectively there were losses of $116 and $336. Total costs for a month of testing reached $199 or amounted to 7.96% of the initial capital. The trader still has a reserve of $2301, which allows him to conduct financial experiments on other models and ideas. But when evaluating transactions and actions, it is found that 11 losses were prevented on trading positions ranging from $500 to $1450, which were beyond the loss limit and could have completely nullified the capital in the first or the second decade.
Detailed consideration of financial loss situations is done after exporting reports to Excel or Google Sheet, pushing CSV files to a MySQL or pandas database written in Python. Subsequent application of cluster chart and heat map, transaction efficiency and order flow by time periods become the basis for algorithm development, simulation and backtesting. As role models, the Merehead team periodically selects winners in various industries of Benzinga Fintech competitions - executives and developers, successful startups with analysts - to add individuality and conciseness to each software development.
This list includes back office admin functions - setting up and connecting API with accounts, integration and team management, two-level sub-IB tree, regular generation and sending of reports to Excel, analytical module with history, comparison of plans and achievements, deposit actions. Swap-free accounts are automatically connected for Muslims. In the sales module traders can plan and transfer, change tasks, prioritize and secondary, interact. Sales analytics, dashboard charts, % of trades are connected for this purpose: data is archived after use. UTM tags embedded in customer offers - opportunity to offer bonuses to prospective leads.
Futures are designed to extend CFD trading in commodity positions and indices: in case of a decrease in liquidity at expiration, positions are rolled over to another contract. The rollover chart is formed with the adjustment reflected in the swap contract in the gap cells. Adjustment of balances is carried out when calculating ratios of investment and equity capital ratio, growth of fixed assets when attracting clients and decrease when withdrawal of funds takes place. Orders and trades are placed in a hedged account, the balance of which is displayed with charts and graphs including gains and losses. Built-in trading robots and advisors, plug-ins are integrated into additional applications.
Realization of business goals in proprietary trading is impossible without software that performs digital transformation, exchange of ideas and norms, concepts and assumptions in the context of fintech services for a specific target audience, including B2B customers. Merehead develops software for prop trading platforms and specialized software for CRM, taking into account business strategies and required functionality. The development process is not a mechanical assembly of solutions and options based on the principle of combining suitable program modules, but a creative elaboration based on examples of solutions of profitable firms and protection against risks (subsidence or slippage of asset and cryptocurrency rates). Besides turnkey development, there are offers to rent software with subsequent buyout at will.
Submit your questions in the form or in a convinient way - by sending a request to e-mail or calling the contact number: we will answer during working hours on 8/6/365. Having passion and professionalism, working with “lights in eyes” - that's Merehead. Especially since, in light of recent events, President Donald Trump will support cryptocurrency trading initiatives. It is the 11th year on the market of services, confirming that the team made the right choice - during this time added to the short list of at least a hundred companies, each of which has created a unique economic ecosystem with the help of developed and improved software.
