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I'm looking for suggestions on how to determine the number of people who
use platforms such like TradeStation for their trading. How would I
determine what platforms have the biggest market share, and what is the
size of the userbase for each platform?
I'm trying to develop a business plan for a start-up I'm working on. The
plan must contain a market analysis; that is (from large to small):
1. How large is the SERVICEABLE market? (Say, speculators and possibly
hedgers, but not fundamentals traders or passive investors who let an
account manager do their trading)
2. How large is the ADDRESSIBLE market? (e.g. technical traders)
3. How large is the PENETRABLE market? (This is the most important
question - this market would be, I think, the user base of traders who use
platforms that we can support, such as TradeStation, NinjaTrader, eSignal,
etc.)
I thought I could find out the TradeStation user base from their annual
report, but I couldn't. They report $7.75 million in subscription fees in
2008, which would imply anywhere from 25,800 to 77,500 customers depending
on the mix of brokerage ($100/month) vs subscription ($250-$300/month).
Even so, the high end of that range doesn't seem big to me - if we gain
0.1% of those customers to subscribe to our services, that's only 25 to 77
people. Maybe triple that for supporting other platforms like eSignal and
NinjaTrader. It's tough to run a business that earns a living with so few
customers.
Suggestions? Market analysis is always the most difficult part of any
business plan. And not doing it is one reason why many new business fail
or never get off the ground.
-Alex
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