This is definitely a great time to be a Forex trader. We are surrounded with reliable sources of information, supplied with highly technological tools and we can also say that our beliefs and values are met by most brokers. For example, at this point there are brokers who undertsand the significance of the Sharia Law for the Muslim community and do their best at making Forex Islamic trading posible. However, in order to know for sure whether creating an Islamic Forex account will guarantee you the compliance with the religious requirements, we should start by taking a closer look at the technicalities of Islamic trading.
Forex trading Islamic view
Many Muslims trading around the world will confirm that their trading process is somewhat restricted by their spiritual beliefs. But the good news is that it doesn’t have to be this way. According to Sharia Law Forex trading on its own is not contradicting with the moral, however there are some elements that should be avoided by the Muslim community. The main concern from the Islamic point of view are swaps. Swap in Forex trading is expressed in the form of interest that is being whether earned by or charged to the trader for the positions that remain open overnight. It is a known fact that a lot of trades can stay open for several days and it makes sense that as the market rolls over the 24 hour mark, certain charges should take place from strictly technical perspective. But we also know that interest is considered Haram in the Muslim world, as it turns money from simply being an exchange instrument into an expluatation tool. The logical solution to this scenario is swap free trading, but how exactly is it possible?
Islamic trading rules stay nearly the same to the non-Muslim ones for the most part, so it might seem slighly out of balance that Shariah based Forex broker will exclude a pretty visible part of the trading process for a specific trader group. The explanation here is very simple: while the brokers who support Sharia oriented trading will in fact allow to eliminate the swap, they will compensate it with a fixed fee which will let them cover the charges associated with carrying the trade overnight. This way both the Islamic Forex broker and the Muslim trader are happy – the broker is following the general rules of the market by paying the cost of their operations and the trader knows exactly when and how much they will be paying. Compared to the swap, which can really go either way during the night, this sounds like a more rational option. All you need to do to start trading in compliance with Sharia Law simply open an Islamic swap free Forex account with a broker today and experience full-scale currency trading, while still staying true to your Faith and its moral.