Starting your journey with forex trading: Everything you need to know in 2025

🎯 What is Forex? Why is Forex investing attractive?

Forex (Forex or FX) is a decentralized currency trading market that operates 24/7 worldwide. It is not a physical location but a global network where financial institutions, businesses, and investors trade currency pairs.

Daily, the trading volume on the forex market reaches approximately 5.3 trillion USD — this enormous figure shows why forex investment has become a top choice for many individual and institutional investors.

Unique features of forex:

• Open 24/7, allowing you to trade at any convenient time
• Very low entry costs — just a few hundred thousand VND in margin
• Transaction fees are negligible compared to other investment channels
• No single organization can control the entire market

💱 How does the forex trading mechanism work?

Major currency pairs

You trade forex through currency pairs like EUR/USD, GBP/USD, USD/JPY. Each pair consists of two components:

• Base currency (Yết giá ): The currency listed first (e.g., EUR), representing its value
• Quote currency (Đồng định giá ): The currency listed second (e.g., USD)

If the EUR/USD pair = 1.1500, it means 1 EUR = 1.1500 USD.

Example of real forex investment

You predict that EUR/USD will increase:

• Buy 10,000 EUR at an exchange rate of 1.1500 (cost 11,500 USD)
• After two weeks, the rate rises to 1.2500
• Sell 10,000 EUR and receive 12,500 USD
• Profit: 1,000 USD from one trade

But this is just the exciting part — the trading platform supports you using leverage that allows trading with much larger amounts than your capital. With 200:1 leverage, you only need about 60 USD in margin to execute the trade!

📊 5 reasons why forex investment is becoming increasingly popular

1. Transaction fees are almost nonexistent

When trading forex, you don’t pay management fees, brokerage fees, or complicated taxes. The trading platform only earns profit from the spread (the difference between buy and sell prices) — a very small margin.

2. Flexible timing

The Forex market never sleeps. From early morning to late night, you have opportunities to trade. Perfect for those who want to do side business outside their main job.

3. No “market boss”

The forex market is huge and has many participants. Central banks, large corporations — no one can control the entire market.

4. Power of leverage

A small margin can open up enormous trading opportunities. However, leverage is a double-edged sword — it can help you earn big profits but also cause quick losses if risk management is poor.

5. Very low barriers to entry

Unlike stocks or real estate, you can start forex investing with just 50 USD.

🚀 9 steps to start forex trading from zero

Step 1: Master 8 core concepts

Before trading, you need to understand clearly:

Long (Buy) — Predict the price will rise, buy to sell higher
Short (Sell) — Predict the price will fall, short sell to buy back cheaper
Leverage (Leverage) — Trading with borrowed money, e.g., 50:1, 100:1
Margin (Margin) — The deposit with the platform to open a trade
Pip — The smallest price movement unit (EUR/USD from 1.2000 → 1.2005 = 5 pips)
Spread — The difference between buy and sell prices, this is the platform’s fee
Lot — Trade size (nano, micro, mini, standard)
Drawdown — The reduction in profit during trading

Step 2: Learn about different trading markets

There are many ways to trade forex:

Spot Forex — Trading actual prices, settlement immediately or within 2 business days (prohibited in Vietnam)

CFD (Contract for Difference) — A contract that pays the difference, you do not own the actual currency but bet on price changes. This is the most popular form today.

Currency Futures — Futures contracts, trading at a future date at a pre-set price (less common)

Currency Options — Options to buy or sell currency, predicting price increase/decrease within a certain timeframe (less common)

Choosing a reputable international broker is crucial to protect your capital.

Step 3: Choose a reputable broker

Criteria for selecting a broker:

• ✅ Licensed by international regulatory authorities
• ✅ Low transaction and commission fees
• ✅ User-friendly trading platform
• ✅ Good customer support
• ✅ Trading products that suit your needs

Step 4: Open a trading account

Simple process:

1. Provide personal information (ID card/Passport)
2. Verify email and phone number
3. Link bank account
4. Deposit margin (minimum $50)

Step 5: Decide on currency pairs to trade

Analyze factors:

• Economy: Which country has a strong economy? Will USD go up or down?
• Trade: Which country exports more? Its currency will appreciate
• Politics: How will elections, interest rate policies affect?
• Financial news: Employment reports, inflation have big impacts

Step 6: Determine margin amount

If you want to trade 100,000 USD with 1% margin, you only need $1,000 in margin. However, a safety rule is: risk only 2% of your capital per trade.

Step 7: Decide to buy or sell

• BUY the currency pair if you believe the quote will strengthen

  • Advantage: Every price increase yields profit
  • Disadvantage: Every price decrease causes loss

• SELL the currency pair if you believe the quote will weaken

  • Advantage: Every price decrease yields profit
  • Disadvantage: Every price increase causes loss

Step 8: Set risk management orders

Stop Loss Order — Close the trade when losses reach a certain level. For example: Buy EUR/USD at 1.1500 and set Stop Loss at 1.1400. If the price drops to 1.1400, the order automatically sells to protect your capital.

Take Profit Order — Close the trade when profit reaches your target. For example: Buy at 1.1500, set Take Profit at 1.2000. When the price reaches that, the order automatically sells to lock in profit.

Real example: EUR/USD is currently at 1.11128, you predict it will rise to 1.2000 then fall. You place a limit sell order at 1.2000. When the price hits 1.2000, the order executes automatically.

Step 9: Monitor trades, control emotions

The forex market is always volatile. You will see prices fluctuate constantly, but the key is:

• Stick to your strategy
• Avoid emotional trading
• Continuously learn from each trade
• Maintain discipline in risk management

🔍 5 main factors affecting the forex market

Central Banks

Monetary policy, interest rates, quantitative easing — all directly influence currency prices. When the US Federal Reserve raises interest rates, USD usually appreciates.

Economic news and reports

Employment reports, GDP, inflation — these data have enormous influence. Countries with good economic reports will see their currencies bought more.

Market sentiment

Traders’ beliefs drive trading behavior. If sentiment is optimistic, currencies from developing countries are favored. If fearful, safe-haven currencies like USD, CHF will strengthen.

Interest rate differentials

If Unit A has 5% interest and Unit B has 2%, investors prefer Unit A’s currency for higher returns.

Geopolitical events

Elections, international tensions, major policy decisions can cause market volatility.

🎓 Frequently asked questions about forex investing

What is the total daily trading volume?

About 5 trillion USD daily, equivalent to 220 billion USD per hour. This shows the market’s infinite liquidity.

Who are the market participants?

• Governments and central banks
• Major banks (JP Morgan, Goldman Sachs,…)
• Investment funds and asset management companies
• Multinational corporations
• Individual traders (accounting for about 30% of trading volume)

How is the Forex market regulated?

There is no single regulatory authority. Instead, each country has its own agencies (in the US, CFTC and NFA). Brokers must comply with international standards to operate legally.

What is the success rate of traders?

Statistics show about 90% of trades are speculative, but 70-80% of new traders lose money in their first year. The key is patience, good risk management, and never giving up.

💡 Conclusion

Forex investing is not a quick way to get rich but a legitimate, transparent, and the largest investment channel globally. With high liquidity, low entry costs, and opportunities to profit from both rising and falling trends, Forex has become the choice of millions of investors worldwide.

Your journey in forex investing will succeed if you:

• Keep learning continuously
• Manage risks strictly
• Build strategies patiently
• Never trade emotionally

Start today, small steps will lead you to great success.