How does democratization of trading affect popular investment platforms?

FinanceFeeds Editorial Team

For the last few years, the expert community has been concerned about the simplification and gamification of the trading process. Some brokerages are trying to democratize trading by introducing new services, while others argue against gamification and are focused on diversifying their business with new trading instruments and better server performance.

For the last few years, the expert community has been concerned about the simplification and gamification of the trading process. The industry itself has responded to these changes in several ways, including strengthening regulatory requirements for brokers. Some brokerages are trying to democratize trading by introducing new services, while others argue against gamification and are focused on diversifying their business with new trading instruments and better server performance.

A similar reaction was noticed towards investment systems (now known as PAMM, MAM, and Social Trading) when these were launched in the market a decade ago. These systems have changed the trading industry forever. Nowadays, such systems are not only a common means of attracting new traders but are also independent/self-sufficient services popular among both newcomers and seasoned investors.

However, if we closely look at the users of investment systems, two main groups of traders emerge. These groups are affecting simplification and gamification trends and offer a great contrast in terms of their skills, behaviour, and goals.

Group A consists of traders with little experience: some of them use money management systems to diversify their trading strategies, while others joined the industry after using single-click investment services introduced by banks. The main goal of traders from this group is to get basic knowledge about the platform’s functionality, overcome the lack of trading experience, and make the first profits. In contrast, Group B mostly comprises professional traders who elaborately understand the platforms’ functionalities and use additional services for analysis. These traders aim to optimize the trading process, make it more convenient, and multiply their gains.

As we can see, both A and B groups are interested in setting the trends that accelerate the market, albeit with contrasting intentions. Therefore, to attract them, brokers need to implement completely different functions in their platforms. Let’s take the example of simplification.

For Group A, the simplification of systems is necessary to reduce the number of visual elements and simplify the platform interface for maximum user adoption. Moreover, simplification may include some functional limitations to protect inexperienced traders from using unwelcome, risky strategies. As for Group B, the key advantage of the simplified version of investment systems is the convenience of performing basic actions. This way, using the “lite” interfaces, professional traders can open and close transactions from mobile devices without additional efforts. However, when it comes to in-built analytical tools, the needs are different. While newcomer traders want to learn about simple indicators and graphics, their experienced peers use a third-party’s advanced services to get all desirable data.

Similarly, gamification elements also differ among agents of these two groups. Mostly, traders from Group A are only exploring the trading industry — they are not ready to make large deposits and are often afraid of massive trading volumes. That is why services such as Robinhood appeal to them. The original trading symbols (synthetic symbols) are also a desirable element of gamification for them. 

For Group B, gamification usually concentrates on issues of competition and interaction with other traders. Matured traders are interested in features that can highlight their advantages, including experience and profitability. For example, traders’ contests or special badges may prove their skills and attract subscribers or investors.

Despite the significant difference in the desires of the two groups, some crossing points are relevant for all traders — the communities.

Communities go hand in hand with gamification and often make it a viable strategy. Facebook groups or Telegram chats are already widespread practices in the trading industry. Such communication channels not only offer traders useful information but create a feeling of support and belonging to a special group of people with similar interests. Members may socialize and compare their analysis with peers to improve their performance and increase profits. A recent event with Gamestop stocks demonstrates the power of trading communities.

To conclude, it’s clear that massive and influential trends such as simplification and gamification are not straightforward processes. They represent demands of diverse investor categories that may look similar on the surface but are contrasting in nature. The dissimilarity in experience, goals, and trading behaviour of these users often do not allow brokers to simultaneously attract and retain the attention of both groups. When the difference between parts of the same audience becomes clear, brokers can optimize their trading offers according to the interests of a specific group of traders.

Once a broker defines their target audience, the next big project is to find a reliable technology provider who cannot only provide all the required solutions but also offer technical support and trading platform consultations. At Brokeree Solutions, we embedded a feedback loop that allows us to innovate and update our product portfolio before trends come to fruition.

Read this next


Top Crypto Highlights for Q2 2024: BlockDAG’s Astonishing 1120% Growth Compared to Solana’s Surge and Toncoin’s Market Triumph

Explore the latest highlights in cryptocurrency: Solana’s recovery, Toncoin’s record levels, and the rise of BlockDAG’s innovative technology.

Digital Assets

Ripple seeks $10 million penalty citing Terraform fine in SEC case

Ripple Labs wants to reduce the financial penalties proposed by the U.S. Securities and Exchange Commission (SEC) by leveraging recent fines imposed on Terraform Labs.

Digital Assets

Swiss regulator shuts down CoinShares’ partially-owned FlowBank

Switzerland’s financial regulator, FINMA, has closed FlowBank SA and placed it into bankruptcy due to severe breaches of capital requirements and other supervisory laws. This follows a series of enforcement actions against the bank that began in October 2021.


Presale Power Players: 5 Crypto Presales Primed for Success in 2024 According to Experts

Unlock the potential of the best presale cryptos available now. See why experts recommend BlockDAG, Bitbot, eTukTuk, 99Bitcoins Token, and ButtChain.

Executive Moves

Paxos axes 65 jobs, cuts headcount to below 300

Stablecoin issuer Paxos has laid off 65 employees, equating to 20% of its staff, despite maintaining a robust financial standing.

Institutional FX

US sanctions trigger major shifts in Russian FX market, says Sergey Romanchuk

The U.S. sanctions imposed on June 12 against the Moscow Exchange and its clearing entity, the National Clearing Center (NCC), are set to cause massive disruptions in the Russian currency market, according to FX industry veteran Sergey Romanchuk.


BlockDAG’s X1 Miner App Beta Sparks $49.2M Presale Rise; Uniswap & XRP Whales Getting Involved?

Experience BlockDAG’s meteoric 1120% presale rise, Uniswap’s UNI climbing 18%, and Ripple’s XRP anticipating ETF approval. Explore their latest breakthroughs!

Market News, Tech and Fundamental, Technical Analysis

GBPUSD Technical Analysis Report 13 June, 2024

GBPUSD currency pair can be expected to fall further toward the next support level 1.2700, which has been reversing the price from last month.

Institutional FX

U.S. sanctions halt dollar and euro trading on Moscow Exchange

New U.S. sanctions against Russia have led to the immediate suspension of trading in dollars and euros on the Moscow Exchange (MOEX), the country’s largest exchange group.