Intro
Forex trading is an attractive way to invest your funds, but only if you know how to trade. Currently, there are many ways to acquire education and knowledge in various fields. In this article, we will look at the advantages and disadvantages of learning Forex through free and paid courses, as well as with the help of the YouTube platform.
What is Forex Trading and How Does It Work in Vietnam?
Forex trading is a tool for investors to multiply their capital. Forex trading is the process of speculating on currency rates. Currencies on the market are traded in pairs. That is, when you buy one currency, you sell another of the pair. There are different types of currency pairs: major, minor and exotic. Major pairs include the US dollar and the most liquid currencies (EUR, JPY, CHF, GBP). Minor pairs are those that do not have the US dollar but include one of the most popular and liquid pairs (EUR, JPY, GBP). Exotic pairs are pairs that include one of the major currencies and the currency of a developing country. Usually, these pairs are considered not very liquid. The exchange rate of currency pairs is an expression of how much currency quote you need to give to buy the main currency. The foreign exchange market is affected by many factors that cause currency prices to fluctuate. The goal of the trader is to buy the currency at the lowest price and sell at the highest price, and get the difference as much as possible because this is what the trader earns. To start trading on the forex market, you need to have at least basic knowledge, and you can get it in different ways. We will consider them below in more detail.
Ways to learn Forex trading basics In Vietnam
Learn in free courses
One of the best platforms with free courses is Daily Forex FX Academy.
Learn on paid courses
Paid courses, like free ones, offer you a ready-made curriculum, but unlike free courses, most paid courses also offer you mentoring, which can be done in various ways, like chats, online lectures, etc.
So if you do not understand something, you can contact the lector or the mentor. Successful traders are often mentors on courses. In addition, you can often contact those who are taking this course together with you and share ideas and interesting information about the course.
Choosing paid courses, you risk not only your time, but also money, so we advise you to read reviews of courses, both directly on the platform that offers this course and on thematic forums, so that you do not spend your money in vain.
Learn with youtube channels
YouTube is a hosting platform on which any user can post videos on any topic. So there are hundreds of millions of videos on YouTube, a significant amount of them are educational videos. Some videos teach you math and languages and, of course, you can find Forex trading videos. One of the biggest advantages of learning Forex on YouTube is that the content is provided for free. Also, the information presented in the video is better for understanding, because you perceive the information, which is also reinforced with visual content. A significant advantage of using YouTube as a platform for learning is free access to videos and their variety.
The reason for this is that any user can upload a video to the platform, as well as the fact that creating a video does not require extremely high costs or special skills. However, this is also a disadvantage of studying through the platform, because due to a large number of videos, it is difficult to choose a high-quality one with useful information, so it is very important to pay attention to the number of subscribers and comments.
Popular and large YouTube channels offer a variety of videos. Usually, their content is divided into thematic playlists, and you can find a playlist for beginners, a playlist that will help you understand indicators, a playlist on how to choose a trading platform, etc. There are also channels dedicated to covering news from the market, and they may come in handy for carefree trading. The most popular channels for learning Forex are Warrior Trading (1 million subscribers), Trading 212 (889 thousand subscribers), and Adam Khoo (877 thousand subscribers).
Using a Micro Forex Account to learn to trade in Vietnam
If you already have basic knowledge about Forex trading, or have just completed a course and want to test your knowledge in practice, then it will be quite appropriate to use a micro account.
First, let's understand what a micro account is. A micro account is an account whose deposit is a tiny amount, for example, $10. A micro account is different from a demo account because it is still real money, while a demo account is just a simulation.
Such an account can teach you how to allocate funds to deals, manage risks, find entry and exit points, and use leverage properly.
How to Place a Forex Order
Pip
The minimum fluctuation in the exchange rate of a pair is called a pip, that is, the minimum fluctuation in the ratio of one currency to another in the pair. A pip is equal to 0.0001 currency units. If you trade a lot of 5 units, then a change in the exchange rate of 1 pip will mean a quarter of a pip of 0.0005 units of currency for you. When the volume of the trading position increases, the value of one pip will also increase.
Stop Order
Both stop orders and limit orders are types of delayed orders, that is, which will become market orders only under a certain level. A stop order is actually a stop loss order because if the price begins to move in an unfavorable direction for the trader, for example, the price of an asset owned by the trader starts to fall, then with the help of a stop order, the trader can set a price, reaching which a market order will be placed. (This is a sell order).
Limit Order
A limit order assumes that you want to buy or sell an asset at a better price, so you can place a limit order to buy and determine the price (which is lower than the current price) at which your order will become a market order. If the trader places a limit order to sell at a price higher than the current market price, then the order will become market one only when the price of the asset reaches a certain level.
Learn About the Currencies You Trade in Vietnam
In Vietnam, you should trade major currencies and minor currencies because they have higher liquidity than exotic pairs, as well as smaller spreads. It is also worth searching the currencies you are going to trade. This is important because each currency has its own characteristics, which are influenced by various factors that should be paid attention to in order to analyze the further movement of the pair.
Common mistakes that beginners make
No prior research
In Forex trading, your profit depends entirely on market changes, so before you start trading, you should find out what affects it, what events are happening, what are the current trends, and so on.
Not following a trend
When you trade according to the trend, you buy the currency when its rate is increased and sell when it is decreased, and accordingly, you get a result equal to the difference between the purchase and sale price. Usually, when you trade against the trend, you get a negative result.
Trading unknown currencies
The economies of different countries depend on different factors, so before trading currencies, you should see what specifically affects the economy, whether the market is waiting for a certain event that can affect currency fluctuations, etc.
Leverage
Using leverage, you can trade larger lots than you have available with your own investments, but as you could read above, the value of one pip increases in proportion to the size of the lot. So, if the price starts to move in a direction that is not profitable for you, it can increase your losses.
FAQ:
What is stop loss in Forex trading?
Stop loss is a type of delayed order in Forex trading, which helps to avoid unnecessary losses. If you own a certain asset (currency), you can define a price (lower than the current one) at which this order will become a market order. This protects you from losses if the value of the asset starts to fall.
What is profit order in Forex trading?
This is a pending order that closes the deal when the price of the asset reaches a certain value, and it helps to lock in the profit.
What should you study in college to learn Forex trading?
Degrees such as business, economics, and statistics can be useful.
How Much Money Do You Need to Start Forex Trading in Vietnam?
You can start trading in Vietnam with 50-100 US dollars.
How long does it take to learn Forex trading in Vietnam?
You can get the basics in a week, but once you start trading, you can continue to learn new things and deepen your knowledge.
How long does take to learn Forex trading in Thailand?
You can get the basics in a week, but once you start trading, you can continue to learn new things and deepen your knowledge.
Conclusions
In this article, you can get acquainted with the ways of learning Forex, and you can choose the one that will be more convenient and affordable for you. Learning will help you avoid common mistakes and make more profit, so it is really worth paying attention to it.