can i trade my IPAD(1st generation) for IPAD2 in apple store

No.

http://www.apple.com/recycling/ipod-cell-phone/

that is a link to apple recycling program, and then you can buy another one. for some reason though people prefer to sell on eBay.

Apple do not accept trade in.

Sell it on the open market, you'll get better price.

Your only option is to sell the iPad and buy a new one.

How to Sell Your Old iPad http://tinyurl.com/85d69lk

Other sources to sell.

eBay Instant Sell http://instantsale.ebay.com/?search=ipad

Sell and Recycle Used Electronics - Gazelle http://www.gazelle.com/

For instant gratification in selling a used iPhone or iPad, Gazelle’s Gadget Trader, an iOS app, is tough to beat. In seconds it detects the device and reveals how much it is worth in good condition. Tap the Sell This Phone to Gazelle button and the deed is done.

Sell Electronics for Cash - Next Worth http://www.nextworth.com/

Buy My Tronics http://www.buymytronics.com/

Sell Your iPad http://www.sellyourmac.com/mac-product-guides/ipad.html

Totem http://www.hellototem.com/

 Cheers, Tom 😉