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Ask HN: [System Design] How would you build a trading system?
4 points by me_me_mu_mu on June 1, 2022 | hide | past | favorite | 7 comments
How would you build a trading system (similar to whatever stock or other exchanges you may use)? I'm really inspired by coinbase and robin hood, but how they heck are they built?

I am trying to learn more about this but my google searches are not turning up the right results. What is involved on the backend? What systems are in play and how do things work at a high level?



Think. Search. Design. Would be my approach.

What do you need/want. Search for possible resolution and Software. Design the basics on paper. Do some guestimates on the running costs.

Then, start building.

There is a reason you can't find anything on Google. You can't google property (learn it!) Or there are no results for the given search. May be it's for a reason, too.

Would you disclose or build up how-to and tell every secret in the open? There are two kinds of people. The few who get it done, and the majority, the lot who waits until they are told how to do.

Which is you?


The basics are: you’re having an order book where you keep bids and asks. Then you can match market orders to that book.

Now you probably want that book in memory, and you probably want to have many of these books, one for each asset type traded.

Then you want some replication and fault tolerance, likely some ACID and guaranteed on-disk storage.

Many market orders probably should form a queue which is executed sequentially.

Etc, etc…


Some of the detailed design info is hard to find: those who have done it like to get paid a lot to do it again, so ... they don't write it down.

The best way to work this out is to get a job at a trading firm, broker, exchange, bank, etc. Plenty to learn, and well paid.

But try "matching engine" as a search term.


[1] This is a pretty good explanation on the difference between order-based markets and liquidity-based markets. It's decentralized (DeFi) focused, but still very informative.

[1] https://youtu.be/cizLhxSKrAc


https://stackshare.io/coinbase/coinbase

https://stackshare.io/robinhood/robinhood


Might find this video from Jane Street helpful:

https://m.youtube.com/watch?v=b1e4t2k2KJY


Build it one use-case at a time, carefully modeling the domain with a domain expert.




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