The financial world in general and the currency sector in particular has a lot of new knowledge, especially for newbies - those who have just set foot in it, to understand this market we are required to have a lot of knowledge. Time, day and day accumulate knowledge, but if you are new and don't know where to start, here is a list of the most common questions with answers that you can refer to! Let's get started!

1. What is trading?

Trading is the act of trading two currencies against each other. For example, if you are trading the EUR/USD pair because you think the EURO will be stronger against the USD and as a result, you will make a profit. However, you can still lose money if your prediction is incorrect, in which case the EUR weakens against the USD.

2. What is the "ask to buy - bid" price and the "ask - ask" price?

The "bid" price is the highest price a trader is willing to pay for a stock/financial product, while the "ask" price is the price a trader will accept for that stock. Those who want to buy a stock are called "biders" and those who want to sell are called "askers".

3. What is “spread”?

Spread is the difference between the "ask to bid" price and the "ask" price of a currency pair/trading instrument that is calculated when traders place a trade. Therefore, it is better to choose brokers with low spreads.

4. What is “Leverage”?

Financial leverage works by allowing the trader to borrow money to increase the potential return of an investment.

Example: If you open a trading account with 1,000 USD and the broker offers you 1:30 leverage, this means you can trade up to 30,000 USD in volume.

However, it should be noted that this is a double-edged sword, it can multiply the potential profit x times (as in the example above is 30 times) can also magnify the loss x times.

5. What makes the market price fluctuate?

Economic and geopolitical factors are likely to drive market prices. These include political developments, wars, pandemics, and more. However, it is very difficult to predict the market!

One thing to keep in mind is to check the news calendar before entering a trade to see if there are events that could potentially affect the price's ability to move.

6. Is trading risky?

Trading and especially trading CFDs is considered very risky because CFDs are complex financial instruments and there is a risk of losing money quickly due to the use of high leverage.

The markets can experience a lot of price volatility, so investors interested in trading should exercise extreme caution or can consult experienced traders/experts in risk management. before entering the market.

7. How much money do you make from trading?

There are many traders, especially those who are just starting out, just because they think they will make a ton of money quickly. However, the reality is often far from that.

In theory you can make a lot, a lot of money from the market, but the other side is often less talked about, the market often squeezes your pocket before you have a chance to realize this goal. Therefore, there is no exact answer to this question.

8. Is the transaction legal?

Yes, trading is legal in most countries. However, some countries have restrictions while others have banned trading.

In Vietnam, foreign exchange trading is not prohibited but not recognized by law, so players will not be protected by law.

9. Which trading style suits me best?

Again this is a question that cannot be answered precisely because it depends on your personality and personality. When you start trading, you should find the style that suits you through the following criteria:

a) The time you spend on trading: If you are busy doing something and cannot devote all your time to trading, long-term trading is an option, and vice versa;

b) Size of your account: If you have a small or limited "budget", you may want to focus on small-cap stocks;

c) Your strengths: If you are better with numbers you may want to focus on technical trading, while if you are better with research you could try a fundamental analysis style;

Also, it should be noted that you may not find the right trading style for you after just a few orders. This takes time, and try to manage your capital and emotions well, because only money can once again enter the market when the right style is found.

10. Where can I learn more about trading?

There are so many resources out there, both paid and paid, you just need to Google! Note that it is advisable to try the free resources first, only pay when you find something really valuable.

It should be recalled that the trading method accounts for less than 30% of a trader's success, the remaining 70% lies in capital management, and trading psychology.