ChartIQ | December 3, 2021

Develop active and responsible traders. Insights from Yahoo Finance, Zerodha and E*TRADE.

Written by Anna Shearer

We were recently joined by three of our most well-known clients, Zerodha, Yahoo Finance, and E*TRADE for a discussion about how to move novice traders towards active trader status.

Why does it benefit these financial platforms to educate traders? Why is it in their best interest to see their traders succeed? In this blog post, we’ll provide you with key takeaways from the discussion. Follow the guidance from these industry leaders and learn how to advance traders down the funnel, all while keeping them engaged.

Educate to develop active traders.

All of our speakers discussed the importance of the educational tools to help traders make smart decisions (and advance to higher levels of expertise), but a key takeaway was the value of making the educational components part of the trader workflow.

Tool tips, videos, or risk education components should be easily accessible, preferably built directly into the UI. “We explain a lot of new concepts with the UI and UX. In this way, traders don’t need to step away from the trading platform,” said David Keir, product manager of E*TRADE. “Our tools are designed to make sure traders understand risk and reward easily—on the UI—without stepping out into a class or external video.”

Providing those traders just dipping their toes into technical analysis with educational “teasers” has helped Yahoo Finance keep novice traders engaged. Zerodha values education, and with so many mobile users, created a free mobile app called Varsity — making stock market knowledge easily accessible for their users.

When it comes to education and trading, the right tools should be available to the trader precisely when they need it for maximum success.

Customize to users across the spectrum.

You can learn a lot by paying attention to the trader’s journey from initial account creation to progression down the funnel. Yahoo Finance takes care to pay attention to their trader experience to deliver the right tools at the right time. This personalized experience has helped Yahoo Finance cater to individual trader needs.

“We value a robust onboarding experience,” says Product Owner Umair Malik. “From there we provide users with tools based on where they are in the process, such as product chat, tool tips, videos, and push notifications to maximize trader discovery.”

Yahoo Finance also provides users with a daily newsletter with details around portfolio management, risk management, and a daily section around technical analysis. “We continue to educate our users with research content, along with what we provide on the platform,” Umair explains.

Hear from Yahoo Finance on how they educate their traders.

To prevent a blown up account, slow them down.

No one is going to benefit if a trader blows up their account—meaning they lose too much and exit the markets. Zerodha finds this particularly important, even creating what they refer to as “nudges” that will alert a trader if they are moving too quickly, such as executing too many trades in under an hour.

“To prevent burn rates, what we’ve been doing is to try and nudge them and slow them down so they allocate the risk better,” says Zerodha AVP of Business Faisal Mohammed. “We want them to trade safely and cautiously. While it may seem counterintuitive, and that we’ll end up making less profit margins from them, they’ll stay on for a longer time.”

Hear from Zerodha on how they prevent trader burn rates.

Temporary users are not good for anyone. Building a lifelong relationship between the trader and the brokerage results in a better outcome for both parties.

Trader habits have changed—sometimes for the better.

All of our guests had positive commentary on the youngest generation of users, and surprisingly, the tools they use to receive their information. In the Wild West that is meme stocks and crypto, it was good to hear that young traders are acting responsibly and are able to differentiate between good information and bad.

Zerodha mentioned that the Gen Z users are “more brave” than their predecessors. In India (where the majority of Zerodha’s user base is located) previous generations saw the stock market as “sort of taboo,” putting trading into the same category as gambling. “Now traders find themselves in the system trying to understand a little bit everyday. They have a whole supportive culture through Reddit and Instagram, and influencers are actually helping these investors make better decisions.”

Hear from Zerodha about the next generation of traders.

E*TRADE agrees, with Keir calling the younger subset “a generational surprise. These new investors know what they want and they have ideals behind their decisions. It’s a good surprise to see the level of education new accounts are coming in with.”

A trend towards options.

All of our roundtable guests believe that options analysis and trading is gaining momentum among users of all levels. When it comes to bringing the complexities of derivative trading to your user base, it is crucial to have educational components and risk analysis tools to help them learn the ropes.

“We’re seeing a huge interest among the younger audience around options and technical analysis. Everyone wants to land and visualize these breakouts or breakdowns themselves,” says Umair from Yahoo Finance. “Visualization is key to understanding,” he adds.

Learn more about ChartIQ Options Analysis.

Create responsible traders with ChartIQ.

ChartIQ makes it easy to customize and embed charts with educational components. Tool tips can be customized with explainer notes and videos can be embedded right on the chart to incorporate market analysis, education, and tips right in the trader workflow. Personalizing the charting experience for traders of all levels keeps them engaged. Contact us for a demo to learn how you can develop strategies to create active – and responsible – traders.

Contact us for a free demo.
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