Forex trading is extremely popular around the world, with traders of all faiths. The issue with this is the ethics behind forex trading, especially for the Muslim faith. Is forex trading haram? Forex trading is both halal and haram. If you trade with an Islamic swap free trading account and with a proper investment strategy, you are not incurring interest nor gambling, which are both considered haram. This is still a very grey area and the ethics involved with forex trading are subject to the trader.

Since there is speculation involved with forex trading, it can be very easy to get carried away and stay in losing trades too long. For many traders who are also Muslim, this could lead to gambling or even incurring interest payments, making forex trading haram. The whole argument of whether forex trading is halal or haram comes down to the argument, is forex trading gambling?

Gambling is considered haram and carries a huge black mark against forex traders who actively participate in gambling. This also leads onto a larger question of whether or not leverage in forex is halal, or haram.

The grey area of whether forex trading is haram, comes with the area of gambling. Forex trading, done properly, is not gambling. Every trade has the possibility of going bad at some point. This is where having a good exit plan comes into place — your stop loss. Staying in a bad trade, which is the result of an ill timed stop loss, would be considered gambling and could make forex trading haram. The biggest no-no when it comes to forex trading as a Muslim is to trade on emotion.

Traders of the Muslim faith need to understand that this is the biggest sin of all. Trading on emotion will lead to bad trading habits, which can result in you making buying or selling decisions based on your feelings. This is the exact same thing as gambling, so keep emotions out of forex trading if do want it to be halal. Incurring any type of interest, whether positive or negative, is considered haram.

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Forex trading is extremely popular around the world, with traders of all faiths. The issue with this is the ethics behind forex trading, especially for the Muslim faith. Is forex trading haram? Forex trading is both halal and haram. If you trade with an Islamic swap free trading account and with a proper investment strategy, you are not incurring interest nor gambling, which are both considered haram. This is still a very grey area and the ethics involved with forex trading are subject to the trader.

Since there is speculation involved with forex trading, it can be very easy to get carried away and stay in losing trades too long. For many traders who are also Muslim, this could lead to gambling or even incurring interest payments, making forex trading haram.

The whole argument of whether forex trading is halal or haram comes down to the argument, is forex trading gambling? Gambling is considered haram and carries a huge black mark against forex traders who actively participate in gambling. This also leads onto a larger question of whether or not leverage in forex is halal, or haram. The grey area of whether forex trading is haram, comes with the area of gambling.

Forex trading, done properly, is not gambling. Every trade has the possibility of going bad at some point. This is where having a good exit plan comes into place — your stop loss. Staying in a bad trade, which is the result of an ill timed stop loss, would be considered gambling and could make forex trading haram.

The biggest no-no when it comes to forex trading as a Muslim is to trade on emotion. Traders of the Muslim faith need to understand that this is the biggest sin of all. Trading on emotion will lead to bad trading habits, which can result in you making buying or selling decisions based on your feelings. This is the exact same thing as gambling, so keep emotions out of forex trading if do want it to be halal.

Incurring any type of interest, whether positive or negative, is considered haram. With a standard forex trading account, you will be charged interest on the amount and value of your positions. If you stick to Islamic swap free accounts, you will not need to worry about this.

Using an Islamic or swap free forex trading account will ensure your forex trading is halal. This ensures that you are not incurring interest or any type of fee for holding your trading positions open overnight, since swaps accrue from the time a position is opened until it is closed. I would recommend consulting this list of swap free trading accounts. For a professional investor, forex trading on a swap free account would be classed as halal.

For a novice, it maybe classed as haram. So as a Muslim, you need to ensure that you are trading forex on the right type of account, and sticking to your investment strategy at all times…. In conclusion, forex trading is both halal and haram, depending on the situation. As a Muslim forex trader, to avoid the risk of being haram, stick to swap free accounts and have an exit strategy in place for every trade you enter into.

Avoid overstaying your stop losses and never trade on emotion, as this is gambling. Do not speculate too high with leverage either, though a more experienced trader would know how to do this correctly.

What is your opinion on whether or not Forex Trading is halal or haram for Muslim forex traders? Please feel free to let us know in the comments below…. Kyle Townsend is the founder of Forex Broker Report, an experienced forex trader and an advocate for funding options for retail forex traders. As the forex prop firm industry has grown, so has the amount of prop firms offering funding for traders.

With forex brokers reducing leverage and the industry getting more regulated, trading your Skip to content Forex trading is extremely popular around the world, with traders of all faiths. Article Contents Forex Trading Is Halal, Or Haram?

How To Trade Forex Halal? Continue Reading.

The Holy Prophet SAW says that:. The answer is they can show you the canvas in which no interest involvement can be seen, but on the back of it, interest is present in one way or another. We can start by saying that Islam recognizes that nearly all adult human beings strive to improve their financial positions, and that life involves a large element of uncertainty. However, we then must go on to say that gambling is strictly forbidden by Islamic law, even as a form of recreation or entertainment when undertaken with small monies which the gambler might be said to be able to afford to lose. So if you have a question like this, then for the answer to this question, one should understand the concept of Forex trading or what is forex trading? Any type of trading that does not include the use of leverage, swap interests, or additional interests to the broker, can be considered halal Forex trading. s, or contract for difference, was the cause of the hastened demise of one Irish bank.

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