Many people still wonder what is Forex? In fact, Forex, Foreign Exchange, exchange market, are different names for the global financial market, where the activities of buying and selling currencies take place. According to estimates, the Forex market has a total liquidity of around $5.3 trillion per day.
Who can participate in Forex trading
In Vietnam, only state-licensed financial institutions and banks can buy and sell foreign currencies. It is not legal for individuals to participate in the buying and selling of foreign currencies without going through a bank.
So, is it illegal for Vietnamese to invest in Forex?
Currently, almost all Forex trading floors in Vietnam operate in the form of contracts for difference (CFD), based on the asset that is the currency pair with the exact name Forex CFD.
In principle, Forex trading is based on the buying and selling of fiat currency. For example, you use VND to buy USD. This transaction will be accounted for as a foreign exchange transaction.
However, Forex CFD works based on a contract between you – the buyer and the forex broker – the seller. Both parties agree to speculate on currency pairs on Forex.
For example, if you expect USD/JPY to rise, you would place a buy (Long) order. At that time, the Forex floor will sell it to you.
If you expect USD/JPY to fall, you will place a short order. At that time, the Forex trading floor will buy from you.
It is basically a contracted buying and selling business, which is why Vietnamese law still does not contain any regulations on this issue.
If so, why is Forex trading in Vietnam condemned as a scam?
The problem lies in the fact that the Forex market is a breeze that many people take advantage of and the state still does not have a legal system to coordinate this type of market. If you are new and want to join the Forex market, you need to know how to distinguish between a reputable broker and a scam broker to protect yourself.
Fraudulent Forex Sol in Vietnam
Forex4you, FX Trading Markets, Liber Forex, OT Capital, EU Capital… are the most strongly condemned names in the Vietnamese trading community. These exchanges operate on a tiered Ponzi model scheme, taking profits from the next person and giving them to the previous person. You should be careful with exchanges that are “committed to profit” because investments always involve profits and losses.
Renowned exchange floor in Vietnam
FXTM is the Forex exchange that I want to use as an example because it meets all the criteria: operation for more than 12 years, license from many regulatory agencies (ASIC, CySEC), very competitive trading fees, extremely low commissions (from only $2). per batch), independently audited by PwC. Forex floors that meet these criteria are worthy of your reference and trust.
Where do beginners start trading Forex?
If you are new, the safest and most effective way is to create a demo account on a reputable forex trading floor and get used to the trading environment. Demo accounts are provided completely free of charge, you can place buy and sell orders, apply trading strategies, understand and evaluate the market.
The second way for new Forex players is to join trading communities and sign up to receive free Forex courses on Forex exchanges. These are measures intended to help you accumulate more knowledge and learn from your predecessors without having to invest real money in the market.
Forex Vietnam has come under a lot of criticism from the press lately, however, the underground trading community believes this is completely normal as they have been in the market for a long time and are able to distinguish between reputable brokers and fake brokers. , have enough experience to actually fight and earn real money. I hope you have the most accurate view of the national Forex market and make the most accurate decisions regarding your finances.