Forex trading is halal and haram, depending on the intention and behavior of the individual investor. Trading with a proper strategy and an Islamic account. Trading with a proper strategy and an Islamic account is halal, while with a regular interest collection account without a system, it is considered gambling and haram. Forex trading can be considered halal.
According to Islamic law, something is prohibited or prohibited when the teachings of the Holy Quran consider it that way. Among the activities prohibited by the Holy Quran are gambling and usury, also known as interest or usury. In addition, the consensus among Muslim scholars is that it is OK to exchange currency for spot. This is because spot settlement can significantly reduce the usury aspect of Forex trading.
On this basis, Muslim theologians have reached a consensus that currency trading can be considered halal. The last two, gambling and interest earning, are sometimes associated with forex trading. This is the reason why some people consider forex trading to be prohibited. Alternatively, derivatives for foreign exchange trading allow international companies to hedge their risks on imports and exports.
Forex trading is fully allowed according to Islamic principles if there is no element of interest or gambling involved. All in all, the question “is forex trading halal?” is quite complicated because of the small details and complexities to be paid attention to with regard to the Islamic religion. To avoid excessive risk, Muslim investors should have a profitable forex trading strategy, such as global macro trading, to ensure that they are always halal with their activity. It was recently reported that Muslims who have analyzed all the problems related to Forex trading have decided that the use of a broker is allowed.
This makes it easier for Muslims to put aside critics' statements and start trading Forex as much as they want. However, some strictly adhere to Sharia Law, saying that since brokers are finding other ways to earn from the trade, they will not participate in Forex trading. As such, forex trading will not be considered a game of chance as long as it assumes a reasonable level of risk and is not based on guesswork. The question of whether currency trading is allowed under the laws of Islam has been answered even though currency exchange under certain conditions is still halal.
We have trading accounts that follow Islamic financial principles, ensuring that their trading activities are halal. But I discovered that Forex does not make me trade with the money I deposited there, but that it is only insurance against losses, in case of loss, so that they can take their rights. In the foreign exchange market, short selling simply refers to the common practice of opening a position in the hope that the market value will decrease. However, there is an element of interest related to forward Forex trading, so it is strictly prohibited.
Muslims who open Islamic Forex accounts are usually advised to practice Sharia principles, if they want to become Forex traders. Forex trading has no interest calculations to add or subtract, so this law does not affect the decisions of Muslims. We understand that trading Forex can be complex and difficult for someone who belongs to the Muslim faith to do.