Comprehensive Guide: How to Trade Foreign Stocks from Vietnam in 2025

Why Vietnamese investors should pay attention to foreign stock markets

If you only focus on domestic stocks, you are missing out on significant profit opportunities from global markets. The US stock market— the largest in the world— hosts over 6,300 listed companies and is home to technology giants like Apple, Tesla, Amazon, and Google.

The numbers speak for themselves: the S&P 500 index has increased by over 39% since 2018, while VNIndex has decreased by about 9% during the same period. The Nasdaq index, with a high concentration of technology companies, has even surged more than 64%—an impressive growth driven by the tech stock boom.

In addition to high returns, investing in foreign stocks helps you diversify risk effectively. When the domestic economy faces pressure (interest rate hikes, currency devaluation), international investment portfolios act as a “buffer” protecting your assets.

Major foreign stock exchanges

NYSE—Where established companies set foot

Founded in 1792, the New York Stock Exchange (NYSE) is the oldest stock exchange in the US and also the listing venue for leading global corporations. In 1888, NYSE traded over 1 million shares in a day. By 2022, this number increased to 5 billion shares.

Currently, NYSE operates from Monday to Friday, 9:30 AM to 4:00 PM (US time). According to data from Statista, NYSE’s market capitalization in mid-2022 reached nearly $24.6 trillion—reflecting the strength of this exchange.

NASDAQ—The playground for tech companies

Unlike NYSE, NASDAQ started operating in 1971 as the world’s first electronic stock market. Initially, NASDAQ was just a “quote system,” but gradually developed into a fully automated matching market.

NASDAQ is the second-largest foreign stock exchange in the US and is known as the preferred destination for tech startups. Listing requirements on NASDAQ are less strict than NYSE, so the exchange features many small-cap stocks and startups. As a result, stocks on NASDAQ tend to be more speculative but also carry higher risks.

The top 3 foreign stock indices you must know

S&P 500—Barometer of the US economy

The Standard & Poor’s 500 index consists of 500 top companies selected based on market capitalization, liquidity, and other factors. These companies account for about 80% of the total market capitalization of the US stock market.

S&P 500 uses a market-cap weighted method, meaning if the total market cap of the 500 companies decreases by 10%, the index also drops by 10%. This index reflects the overall trend of the US stock market and is considered the best gauge of US economic health.

Dow Jones—The blue-chip giants

The Dow Jones Industrial (DJIA) index is one of the oldest and most frequently used indices worldwide. DJIA is composed of just 30 of the largest and most influential companies in the US, representing about 1/4 of the total US stock market value.

Unlike the S&P 500, DJIA uses a price-weighted method, so movements in high-priced stocks have a greater impact. Dow is known for its list of “blue-chip” companies, which pay regular and consistent dividends.

NASDAQ Composite—The tech core

The NASDAQ Composite index is a market-cap weighted index of all stocks traded on the NASDAQ exchange. It includes large, small, and speculative companies, mainly in the technology sector.

NASDAQ Composite reflects the performance of the tech industry and investor sentiment toward speculative stocks more than Dow or S&P 500.

Top 10 foreign stocks investors are interested in

Note: P/E values fluctuate over time. Information is for reference only.

Two main tools for trading foreign stocks from Vietnam

1. ETF Funds—Diversify with low cost

(Exchange Traded Fund) (ETF) is a basket fund that mimics the fluctuations of a benchmark index like the S&P 500. ETFs have characteristics of both investment funds and listed stocks traded on major stock exchanges.

Benefits of ETFs:

• Diversify your portfolio at low cost
• No need for in-depth knowledge of individual stocks
• Limit market manipulation and abuse through investing in a basket of securities

Some popular ETFs tracking foreign stocks: Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF (SPY), iShares Core S&P 500 ETF (IVV).

2. CFD (Contract for Difference)—More flexible, higher risk

With CFD contracts, you can trade individual stocks without being limited by a pre-set portfolio like ETFs. However, buying CFDs does not mean owning shares—you’re investing in the price difference of stocks.

Advantages of CFDs:

• Flexibility: Profit whether stocks go up or down
• Higher leverage, access to global markets from a single platform
• Ability to short sell, trade outside regular hours
• Low trading costs

Risks of CFDs:

• Leverage is a double-edged sword—it can amplify losses
• Requires strict risk management

Steps to prepare before trading foreign stocks

1. Choose a reputable broker

Brokers play a crucial role, directly affecting your potential profits. Choose platforms with:

• Proper licensing
• Industry reputation
• Good customer support
• Competitive trading fees

2. Equip yourself with thorough knowledge

Before investing real money, learn carefully:

• Understand how ETFs and CFDs work
• Fundamental analysis: Price, P/E ratio, growth, dividends
• Technical analysis: Charts, trends, support/resistance levels
• Risk management: Set stop-loss, determine suitable trading ratios

Many platforms offer free demo accounts for practice before trading with real money.

3. Develop a specific financial plan

Once confident:

• Determine your available capital (not for essential living expenses)
• Start with small amounts and low leverage
• Increase gradually with experience
• Never risk all on a single trade

The 5 basic steps of foreign stock trading

Step 1: Register a trading account Choose a suitable platform, fill in personal information, verify identity.

Step 2: Find trading opportunities Use platform analysis tools (charts, technical indicators, economic calendar) to identify trading opportunities during market volatility.

Step 3: Deposit margin Depending on the number of stocks you want to buy and leverage level, deposit the required margin. With CFDs, you only need to deposit a small part of the trade value.

Step 4: Execute buy/sell orders

• Buy order (Long): When expecting prices to rise
• Sell order (Short): When expecting prices to fall

Step 5: Manage your position Continuously monitor fluctuations, take profit when targets are reached, cut losses if the market moves against your expectations. With leveraged CFDs, profits and losses are amplified, so strict management is essential.

Suitable choices for different types of investors

If you are a long-term investor (5+ years): ETFs are the optimal choice. You can “buy and forget,” letting the market work for you without daily monitoring.

If you tolerate high risk and want quick profits: CFDs may be suitable, but require solid knowledge and disciplined trading. Start small, learn thoroughly, and always set stop-loss orders.

Important points to note when trading foreign stocks

1. Never invest money you cannot afford to lose: Foreign stocks are not “safe” investments
2. Leverage is a double-edged sword: It can magnify profits but also losses
3. Diversify your portfolio: Don’t put everything into one stock or sector
4. Control your emotions: Make trading decisions based on your plan, not feelings

Conclusion

Trading foreign stocks opens up significant profit opportunities for Vietnamese investors. However, success depends on three factors: choosing a reputable platform, acquiring comprehensive knowledge, and managing risks carefully.

Start small, keep learning, and gradually build your international investment portfolio. With patience and discipline, you can participate in the long-term growth opportunities that foreign stock markets offer.