Discover the Online Forex Market: A Beginner's Journey Starting from Zero for New Investors

Why Are More and More People Interested in Forex Trading?

It’s no coincidence that the foreign exchange market has become one of the popular investment channels. Each country issues its own currency, and the differences between currencies create opportunities for profit. Vietnamese people buy and sell foreign currencies online not only for payment or travel purposes but also because they see the potential for wealth from exchange rate fluctuations.

When you hold a strong currency instead of the domestic currency, you are protecting your assets from inflation and creating growth opportunities. That’s why businesses and individual investors want to access the forex market.

Where Is the Vietnamese Forex Market Now?

In recent years, the development of Vietnam’s banking sector has opened a new horizon for forex trading. Initially, only state-owned banks like Vietcombank had the authority to buy and sell foreign currencies. Today, with private banks entering the game, the interbank market has become more vibrant than ever.

Competition among credit institutions has forced them to offer better exchange rates to customers. Besides traditional banks, private foreign exchange businesses are also allowed to operate, boosting the flow of foreign currency in society. Currently, digital technology has transformed this market into an accessible space, allowing small investors to participate in international trading platforms without large capital.

How Does the Law Allow Citizens to Buy and Sell Foreign Currency Online?

The State Bank of Vietnam clearly stipulates that Vietnamese citizens are allowed to buy and transfer foreign currency abroad for legitimate purposes such as studying, medical treatment, business trips, tourism, family support, or settlement. For each specific purpose, you will need to provide supporting evidence.

Regarding selling foreign currency, individuals and businesses are free to sell to banks or credit organizations. However, if you want to sell foreign currency to other individuals or businesses, only organizations licensed by the State Bank are authorized to do so.

Types of Foreign Exchange Transactions You Need to Know

Basic Transactions: Buying and Selling Directly

This is the simplest form that anyone can perform at banks or foreign exchange outlets. You buy a certain amount of foreign currency and sell it immediately or within a few days. Suitable for personal needs such as travel or business trips abroad.

Advanced Products for Investors

Currency Conversion: Converting from one currency to another at the exchange rate at the time of transaction.

Foreign Exchange Swap: You buy foreign currency now but sell it back at a future date at a pre-agreed rate.

Spot Forex Trading (Spot): Buying and selling foreign currency at an agreed price with settlement within 2 business days.

Forex Contract for Difference (CFD): Allows speculation without owning actual foreign currency. You can make significant profits or losses based on exchange rate fluctuations.

Foreign Exchange Futures (Futures): An agreement to buy/sell foreign currency at a predetermined price on a specific future date.

Foreign Exchange Options (Options): Buying the right to buy or sell foreign currency at a certain price within a specified period. This tool is suitable for both businesses seeking risk hedging and individual investors aiming for profit.

Currency Index Investment Funds (ETF): Funds that track the relative value of a currency or basket of currencies against USD. This is a safer way to access the forex market as risks are diversified.

6 Essential Steps to Start Online Forex Trading

Step 1: Assess Your Risk Appetite

First, honestly evaluate the level of risk you can accept. All investment types carry risks. Determining your maximum loss limit is crucial to protecting your capital.

Step 2: Choose a Reputable Trading Platform

Find a licensed broker or trading platform with a good reputation. The platform should offer analysis tools, investor education, and 24/7 customer support. Registering an account is usually quick, with options like email, phone number, or social media accounts.

Step 3: Deposit Margin Funds (Margin)

You need to deposit money into your trading account. Most brokers allow leverage, meaning you can borrow money to trade larger amounts.

For example: If you have 1 USD in your account and are granted 1:100 margin, you can trade with 100 USD. This is the secret that allows individual investors to participate with small capital. However, note that leverage can also amplify your losses.

Step 4: Choose Currency Pairs to Trade

Next, decide which currency pairs offer the best opportunities. Focus on three main factors:

Interest Rate Differentials: Central banks adjust interest rates to control inflation. A country with high interest rates attracts foreign investment, increasing its currency value. However, high domestic inflation can nullify this effect.

Inflation Differentials: Countries maintaining low inflation rates tend to have stronger currencies because of increased domestic purchasing power. Countries like Japan, Germany, Switzerland historically have low inflation. Conversely, currencies of countries with high inflation tend to depreciate.

Political Stability and Economic Performance: Investors prefer countries with stable politics and strong economies. Political instability can cause investors to lose confidence and shift capital to safer countries.

The most traded major currency pairs are: USD, EUR, GBP, AUD, JPY, NZD, CHF, CAD. Start with these because they have abundant economic data.

Step 5: Analyze Trends and Place Orders

Analyzing whether the exchange rate will rise or fall is key to choosing the right tool. If you forecast the JPY will weaken against USD, you can use Forex CFD to profit from the decline instead of direct purchase.

Step 6: Continuously Monitor and Adjust Your Strategy

Exchange rates change every minute, so you need to regularly check your positions. Forex trading is a long-term game that requires patience, discipline, and ongoing knowledge updates. Always stay alert to market changes and be ready to adjust your plan.

Basic Knowledge You Must Master

Buying and selling foreign currency online is not a game of luck but requires real knowledge. You must understand concepts like exchange rate, spread, margin, leverage, and how to read price charts. Additionally, monitoring global economic news will help you grasp opportunities before the market reacts.

The forex market has existed for centuries, serving traders and businesses. Today, thanks to technology, it has opened to individual investors. If you are willing to learn, control risks, and have a clear strategy, you can leverage this opportunity to build long-term wealth.