The new scarcity in trading software

Aloha traders,

For much of the past decade, the barriers to entry in the trading software industry were substantial. 

Developers of commercial indicators needed years of market experience, a deep understanding of traders’ workflows, and most importantly, the technical capability to translate ideas into practical tools.

As a result, creating high-quality trading software was a highly specialized endeavor pursued by a relatively limited number of developers.

However, the industry has changed dramatically over the last 1-2 years…

What has changed

The most significant change has not come from financial markets.
It has come from technology.

AI (Artificial Intelligence) has substantially reduced the cost and accelerated many aspects of software development. 

AI-powered tools such as code generation, coding assistance, automated debugging, rapid prototyping… have fundamentally altered the economics of the trading software industry.

The consequences are predictable:

• More indicators are created.
• More developers enter the market.
• More products compete for the same attention.

The supply of indicators has grown exponentially while the trader population remains relatively stable.

Abundance has replaced scarcity in most categories…
And when abundance arrives, value begins to shift.

The new challenge of differentiation

Today, the indicator industry is entering a stage where product categories have become so crowded that differentiation is becoming increasingly difficult.

Many products offer similar functionality, similar visualizations, similar concepts…

As alternatives multiply, competition naturally shifts toward pricing – even though value, rather than price, should be the primary basis for comparison.

The reality is not that indicators in general have become less useful.
The reality is simply that creating an indicator is no longer as difficult, labor-intensive, or time-consuming as it once was.

Therefore, differentiation will increasingly depend on fundamental factors beyond software development alone.

The real scarcity today

If software is becoming easier to build, what remains difficult?

The answer lies in:

• Research
• Original research
• Careful observation
• Long-term validation
• Performance optimization
• The ability to separate signal from noise
• The discipline to test ideas across different market regimes, instruments, and environments
• The patience to spend months, or even years, investigating questions that may or may not produce a commercial product

These activities remain expensive. They still require deep domain expertise. And they resist automation.

A trader can ask AI to generate an indicator… But it cannot replicate:

• Decades of real-world market observation
• Thousands of real trades executed in live markets
• A practical understanding of trader behavior and psychology
• Unique research framework and methodology
• Thousands of hours of testing and validation
• Hard-earned market experience accumulated over decades

In other words, the scarce resource is no longer code.

The scarce resource is insight…
And insight is earned through real-world experience and rigorous research.

What comes next

We do not believe indicators are disappearing, nor do we believe that trading software itself is becoming irrelevant.

What’s changing is where value originates.

For many years, software itself was often viewed as the product.

However, the underlying research is increasingly becoming the product, with software mainly serving as the delivery mechanism.

As AI lowers development costs, the quality of the underlying research becomes the primary differentiator… And this trend is likely to become even more pronounced in the years ahead.

The trading companies that thrive in the next decade are unlikely to be those that simply create more indicators.

They will be the organizations that generate premium insights.

They will be the organizations that continuously investigate markets, challenge assumptions, develop proprietary methodologies, and transform research into practical tools that create premium value for traders.

That is the future we believe in!

And it is one of the primary reasons why we are rebuilding NINZA as a research firm, rather than simply a software vendor.

For traders, our expectation is simple: better tools, better outcomes, and more value delivered through research-driven innovation.

***

The industry has evolved…

The forces that created yesterday's opportunities are no longer the same forces that create tomorrow's.

Today, the most valuable asset is no longer the ability to build software.

It is the ability to discover something worth building.

Research is becoming the new moat.

And the companies that invest deeply in research today will be the ones shaping the future of trading intelligence tomorrow.

Our firm belief is that when traders discover a premium research-backed tool that solves a meaningful problem, they remain willing to invest because the value exchange is clear: extensive research & development condensed into a product that can be deployed instantly.

With appreciation,

Larry Pi

Founder, NINZA