Regulations on financial markets could be quite complex. And when it comes to Forex trading and Islamic laws sometimes the traders are unsure what is allowed and what’s not. And is Forex trading halal? We are here to help you to grasp the line between gambling and online trading. Anyway, going for the right broker that allows an Islamic account there would never be a problem.
Forex is not gambling
To trade in the Forex market respecting the precepts of Islam, you must take into account several principles: avoid risky situations, the risks, and the benefits, must be shared. Finally, carrying out transactions with interest is prohibited.
Forex trading should no longer be a barrier for Muslim traders by reducing problems to the element of interest alone. Therefore, one can think that this activity will become acceptable and, therefore, Halal. That said, things are a bit more complex.
Since online trading involves considerable risk, many confuse it with gambling. Unfortunately, and probably because of their lack of knowledge in the field, Muslim imams make this mistake. Yet, the business of online trading requires enormous knowledge and colossal mathematical studies to be reliable. Indeed, for a trader to work properly, it is imperative that he performs four important tasks:
- Complete the training on the Forex market.
- Study the Forex and other markets.
- Learn to trade on online trading platforms.
- Learn to establish good technical and fundamental analysis to create a viable strategy.
In the end, trading is all about a scientific activity and so little about a simple game of chance. The difference in risk between the two activities is so great that it becomes ridiculous to try to put them in the same basket.
In order to avoid falling into the Haram, Muslim traders can simply limit themselves to the safest trading operations, relying only on numerical and factual data.
Even Islamic trading should be done on reliable platforms. We recommend you trade with brokers that offer the best Islamic accounts.
The notion of risk-sharing in Islamic law
This is a concept completely foreign to the basic trading model that the whole world practices. In a trading operation, it is the one who buys to resell more, who will collect the profits or suffer the losses.
In Islam, when two individuals enter into a buy and sell agreement, they will share the gains and any losses. Fortunately, it is possible to easily incorporate a risk-sharing agreement on trading platforms that offer Islamic accounts. In addition, it should be noted that some brokers operate according to a particular model, which does not allow us to know whether it is compatible with Islamic law or not.
The advantages of Islamic trading
Since Sharia formally prohibits Muslims from receiving interest, they will not be able to benefit from Swaps. In return, they will access exclusive fees, which are significantly lower than those for Standard accounts. In this sense, Islamic trading accounts are perfect for novice traders, who are still looking to stabilize the market. Unfortunately, some brokers do not offer alternatives to Muslim traders-Dymoblog.
